FT News Briefing The Fed cuts US economic outlook
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Jun 19, 2025 The Federal Reserve has cut its economic outlook for the US while maintaining steady interest rates. In the UK, inflation remains stubbornly high. Big Tech is pushing for a decade-long ban on state-level AI regulations amid fierce Congressional debate. Meanwhile, the ongoing Israel-Iran conflict is impacting global supply chains, causing a dramatic increase in shipping insurance costs. These discussions highlight the complex interplay of economics, technology, and geopolitical tensions.
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Fed's Revised Economic Outlook
- The Fed downgraded its growth forecast to 1.4% for 2024, reflecting weaker economic prospects.
- Inflation is now expected at 3%, higher than their 2% target, signaling persistent price pressures.
Fed's Interest Rate Divide
- Fed officials are split on interest rate cuts with seven members now doubting any cuts this year.
- This divergence shows increasing uncertainty in the committee about monetary policy direction.
Fed's Cautious Inflation View
- Despite inflation being better than feared, tariffs may still drive prices up as effects unfold.
- The Fed is adopting a wait-and-see approach due to current economic uncertainties.