- Some participants stated that the most likely and appropriate policy path would involve no interest rate cuts in 2025.
- They justified this stance by pointing to the recent elevated inflation readings, persistently high inflation expectations among businesses and consumers, and the ongoing resilience of the economy.
- However, a few policymakers indicated they would be open to considering a rate cut as early as the July meeting if U.S. economic data evolve in line with their expectations.
- All participants agreed that maintaining the federal funds rate at its current target range was appropriate.
- Several participants noted that the federal funds rate might not be significantly above its neutral level.
- Federal Reserve economists projected higher real GDP growth in 2025 than previously forecast, and a lower inflation rate compared to earlier expectations.
- Participants observed that uncertainty surrounding the economic outlook had decreased due to a reduction in announced and expected tariffs. However, overall uncertainty remains elevated.
- They concluded that the risks of higher inflation and a weakening labor market had diminished, though they remain elevated.
The New York Fed’s SOMA Chief added that, according to market participants, the balance sheet runoff is now expected to end in February 2026, compared to January 2026 in the previous survey. He also noted that survey respondents estimate the Fed’s portfolio will stand at $6.2 trillion—around 20% of GDP—with reserves at $2.9 trillion, and a low ONRRP (Overnight Reverse Repo Program) balance.
