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The Federal Reserve signaled a 25-basis-point interest rate cut at its June meeting Wednesday after consumer prices rose at their slowest annual pace in more than a year, reinforcing expectations that policymakers are prepared to ease borrowing costs as inflation retreats toward target.
The Consumer Price Index climbed 2.4% year-over-year, according to data cited by Fed officials, down from prior readings and the softest print since 2024.
The deceleration gave the Federal Open Market Committee room to confirm what markets had already begun pricing in — a measured pivot away from the restrictive policy stance that defined the past two years.
The FOMC's updated dot plot, released alongside the rate decision, validated trader positioning that had called for two cuts through 2026.
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