US Fed rate cut: When are next meeting dates? Will there be big change in interest rates following Inflation data?

Inflation in the US steadied at 2.8 per cent as the consumer price index, released on Wednesday by the Bureau of Labor Statistics, rose 2.4 per cent in May from a year earlier, just above April's 2.3 per cent annual increase. On a monthly basis, the overall measure rose 0.1 per cent, while the core index rose 0.1 per cent. Both were below economists' expectations. Aforementioned metrics are key to gauge initial impact of President Donald Trump's tariffs.

For now, the labor market is cooling, but it has not yet cracked. That has reinforced the US Fed's view that it can take its time before making any big decisions about interest rates. After lowering borrowing costs by a percentage point last year, the central bank has kept interest rates steady since January, at a range of 4.25 per cent to 4.5 per cent, as per a NYT News Service report.

US Fed Meeting Dates 2025

The US Fed officials are widely expected to extend that pause when they gather next Tuesday and Wednesday and maintain the view that they can afford to be patient on cuts. With inflation risks still elevated, the central bank has made clear that before lowering interest rates again, it will need to see clearer signs that the labor market is deteriorating, NYT News Service reported.

The Fed is now grappling with how significantly Trump's policies, which also include curbing immigration, cutting taxes and slashing government spending, will raise prices for Americans, and for how long any resulting period of higher inflation will last as growth slows.

In minutes from the Fed's last meeting in May, the central bank's staff members penciled in a forecast that carries the whiff of stagflation. They said a recession was "almost as likely" as its forecast for subdued growth and higher unemployment. Tariffs, they said, were expected to boost inflation "markedly this year" and continue to add price pressures in 2026 before inflation trended back to the 2 per cent target by 2027.

Officials are most worried that tariffs could ignite a sustained period of price increases rather than a one-off jump. The risk is that Americans start to expect higher inflation over the long term to a degree that ends up becoming self-fulfilling. Such persistent inflation would hamstring the Fed's ability to support the economy -- by lowering interest rates -- if growth slows and the labor market weakens, as per the NYT News Service.

FAQs

Q1. What is current inflation rate in the US?
A1. "Core" inflation steadied at 2.8 per cent. That measure, which strips out volatile food and energy products, is closely monitored by policymakers as a gauge for underlying price pressures. On a monthly basis, the overall measure rose 0.1%, while the core index rose 0.1 per cent. Both were below economists' expectations.

Q2. Who is President of USA?
A2. President of USA is Donald Trump.