Ella 
The Federal Open Market Committee (FOMC) did not announce a cut to the federal funds rate at its June meeting, which concluded on Wednesday afternoon.
The decision to keep interest rates between 5.25% and 5.5% was expected despite the May Consumer Price Index (CPI) showing a larger-than-expected drop in inflation. Rates have been held in this range since July 2023.
Inflation fell to 3.3% on an annual basis in May, compared with expectations of 3.4%. Core inflation, which excludes food and energy prices, fell to 3.4% on an annual basis, also the lowest since April 2021.
May was the second consecutive month of falling inflation as measured by the CPI. While this is not enough for the FOMC to budge on the federal funds rate, the two-month trend lower suggests it is in the right direction.
The FOMC also released its quarterly summary of projections (SEP), or dot plot, which shows that the current consensus is for only one rate cut this year. Analysts had expected the Fed to cut rates twice, so this is a bit disappointing.
In March, the market consensus was that the Fed would cut interest rates three times.
