XAUUSD is moving in an Ascending channel, and the market has fallen from the higher high area of the channel
The Federal Reserve is gearing up for another big decision this week, but don’t expect any surprises. All signs point to the central bank keeping interest rates right where they are, continuing its cautious stance in 2025. Let’s break down what’s going on, why it matters, and how it could affect your finances.
The Fed’s Steady Hand: No Rate Changes Expected
The buzz around the upcoming Federal Reserve meeting on June 18 is centered on one big idea: stability. Based on recent data from the CME Group’s FedWatch Tool, there’s an almost certain chance—99.9%, to be exact—that the Fed will keep its benchmark interest rate unchanged. That rate has been sitting in the 4.25% to 4.5% range since December of last year.
This decision isn’t happening in a vacuum. There’s a lot happening in the background, especially politically. Since President Trump stepped into office again, the Fed has been holding off on any major changes. The main reason? Ongoing uncertainty about the economic effects of new trade tariffs introduced by the administration.
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Even though President Trump has openly urged Fed Chair Jerome Powell to cut rates—particularly after job growth slowed in May—the central bank doesn’t seem to be in any rush to change course. They’re sticking to a wait-and-see strategy, trying to balance economic growth, inflation concerns, and market stability.
What’s Driving the Fed’s Wait-and-See Approach?
Tariffs and Trade Tensions
At the heart of the Fed’s cautious stance is the current economic landscape. The reintroduction of tariffs by the Trump administration has injected a good deal of uncertainty into the market. Businesses are feeling the pressure, and economists are trying to figure out exactly how much this will impact everything from hiring to inflation.
Gregory Daco, Chief Economist at EY-Parthenon, summed it up well in a recent research note: the Fed isn’t feeling the urgency to shift gears just yet. Instead, they’re watching closely to see how things develop over the next few months.
Inflation Creep and Labor Strength
Inflation has been creeping up ever so slightly. In May, it ticked up to 2.4% from 2.3% in April. That’s still within a manageable range, but it’s enough to make the Fed cautious about lowering rates, which could potentially stoke higher inflation.
At the same time, the labor market remains surprisingly resilient. Job creation did slow down in May, but it still exceeded expectations. That shows the economy isn’t exactly faltering—just cooling off a bit.
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Brian Mulberry from Zacks Investment Management highlighted that the data doesn’t suggest any urgent problems. Prices aren’t surging, and the job market is holding up. So, from the Fed’s point of view, there’s no need to mess with things right now.
Here’s What to Expect from the Upcoming Fed Meeting
Key Dates and Timing
The Federal Open Market Committee (FOMC) meets on June 17-18, with the big announcement expected at 2 p.m. EST on June 18. Fed Chair Jerome Powell will follow up with a press conference at 2:30 p.m., where he’ll talk through the decision and the outlook.
Aside from the interest rate decision, this meeting will include updated economic projections. These forecasts will give us a glimpse into what the Fed expects in terms of inflation, unemployment, and growth in the coming months and years.
One thing analysts are keeping a close eye on is whether the decision will be unanimous. Last time around, all 12 FOMC members voted to hold rates steady. But if even a couple members start pushing for cuts, that could hint at a shift in thinking.
What This Means for Your Wallet
You might be wondering: “How does this affect me?” Well, quite a bit—especially if you’re carrying debt or saving for the future.
For Borrowers
If you’re dealing with credit card debt, car loans, or thinking about buying a home, the Fed’s decision to hold rates steady means borrowing costs will stay high. That includes mortgage rates, which are still floating near the 7% mark, and credit card interest rates, which have climbed above 20%.
So, if you’re considering a big purchase or thinking about taking on new debt, it might be worth waiting it out a bit longer—unless you absolutely have to.
For Savers
On the flip side, savers are seeing some benefits. High-yield savings accounts and CDs (certificates of deposit) are still offering decent returns. They’re not as eye-popping as they were a year ago, but they’re still strong enough to make it worthwhile to shop around and lock in a good rate.
Matt Schulz from LendingTree notes that now is a great time to focus on building your emergency fund or even paying down some of your more expensive debt. That kind of financial housekeeping can really pay off, especially when interest rates are high.
Looking Ahead
Even if the Fed does decide to cut rates later in the year, don’t expect an immediate drop in mortgage or auto loan rates. These types of borrowing costs are influenced by many factors, and the Fed’s actions only have an indirect effect.
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Schulz explained that while the Fed doesn’t directly control mortgage rates, a rate cut could act as a positive signal for the housing market. Still, that’s more of a long-term possibility than something that would impact your next mortgage payment.
Final Thoughts: Caution and Clarity from the Fed
As we head into the Fed’s June meeting, the message is pretty clear: no sudden moves. The economy is stable, inflation is creeping but manageable, and the job market is still healthy. That gives the Fed every reason to hold off on changing interest rates right now.
For everyday people, that means continuing to deal with high borrowing costs—but also enjoying better returns on savings. It’s a mixed bag, but one that’s not likely to change much in the near future.
So, whether you’re paying down debt or padding your savings, now’s a good time to take a closer look at your finances and make the most of the current environment. The Fed might not be making any bold moves just yet, but that doesn’t mean you can’t.
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