The Fed holds interest rates steady and forecasts two rate cuts for 2025

Investors were treated to another predictable Fed meeting. Interest rates remained the same, which had been all but a certainty in the lead-up to Wednesday’s decision. The Federal Reserve maintained its position that the economy was stable, even as uncertainty among participants was rising.

Investors and business leaders might feel as though the economy is teetering on a knife’s edge, but the data, Fed chair Jerome Powell reassured them, pointed to a solid picture—though one that was cloudier than before. Whether or not they are storm clouds is the critical question at hand. 

“Uncertainty about the economic outlook has diminished but remains elevated,” according to a Fed statement released after the meeting.

With the question of rate cuts largely a foregone conclusion, investors instead turned their attention to the Fed’s Summary of Economic Predictions, which is commonly referred to as the “dot plot.” The hope is that Fed officials’ quarterly forecast about the U.S. economy, which includes expectations for interest rates, inflation, and growth, will offer some hints about their views for the economy. With the Fed usually circumspect about its outlook, investors often hope to divine some greater understanding about the fate of the U.S. economy. 

The median rate projection was for two quarter-point rate cuts in 2025. 

The previous dot plot, released in March, had the same median projection. One of the major updates from that version was the expectation of lower GDP growth and higher inflation over the course of 2025. At the time, it was a significant development because it meant Fed officials weren’t just considering the possibility of those two unwelcome changes, but also began to see them as the likely outcome of the economy’s current path. 

That said, it’s worth remembering the dot plot is not a commitment to a certain amount of rate cuts; rather, it is a collection of forecasts made by top Fed officials at a given moment in time. Importantly, it also doesn’t communicate how certain each official is in their forecast. 

It is nonetheless an important measure of where the central bank sees monetary policy heading. And with only six months left in the year, the timing left for the rate cuts it foresees (but not guarantees) is only getting tighter. For now, the consensus seems to be that there will be either one or two rate cuts. 

For President Donald Trump, any interest-rate cuts can’t come soon enough. His criticisms of Powell have practically become a customary part of FOMC meetings. In the president’s view, interest rates should come down because inflation has not increased. And while that is true, the Fed is still hesitant to cut interest rates because it isn’t sure yet whether inflation will spike again as a result of Trump’s tariffs.  

So far, the Trump administration has made some progress on the trade agreements it promised—something investors believed would calm the markets. The U.S. says it has signed a preliminary agreement with the UK and established a framework of a deal with China after two meetings. While a welcome early sign the U.S. might return to its previous role in the global economy, the two deals are well short of the dozens promised by the White House. As a result, uncertainty still lingers. 

At the same time, the geopolitical conflicts also risk disrupting the market—namely, the military actions between Israel and Iran. The widening conflict in the Middle East only exacerbates tensions in an already volatile part of the world. Shipping through the Red Sea, oil markets, and U.S. military involvement all now remain open questions. Their potential answers are both varied and significant—unwelcome news for those clamoring for clarity.  

This story was originally featured on Fortune.com