FED - The Fed maintains the status quo

The Fed Maintains the Status Quo

Following its July meeting, the Federal Reserve (Fed) is also expected, unsurprisingly, to keep its key interest rates unchanged.

Key points:

• Key interest rates: The Fed is expected to keep its current range at 4.25% to 4.50%, in line with market expectations.

• Communication: Jerome Powell is expected to reaffirm that the Fed is “well positioned” to maintain a wait-and-see stance. The U.S. economy, supported by low unemployment, remains solid, while inflationary risks continue to lean to the upside, particularly due to the introduction of new tariffs.

In summary

The Fed should confirm its cautious approach, maintaining a wait-and-see balanced stance. The Fed is expected to leave open the possibility of rate cuts later this year, depending on the evolution of several key factors: the magnitude, timing and duration of a potential inflation rebound; the labor market trajectory; and the Committee’s confidence in the proper anchoring of inflation expectations. This meeting should be a non-event. The Jackson Hole symposium (August 21–23) could provide an opportunity to reassess the monetary path in light of upcoming data.

Completed 28/08/2025. This commentary is provided for information purposes only. The opinions expressed by La Française are based on current market conditions and are subject to change without notice. These opinions may differ from those of other investment professionals. Published by La Française Finance Services, head office located at 128 boulevard Raspail, 75006 Paris, France, a company regulated by the Autorité de Contrôle Prudentiel as an investment services provider, no. 18673 X, a subsidiary of La Française. Crédit Mutuel Asset Management: 128 Boulevard Raspail, 75006 Paris is an asset management company approved by the Autorité des marchés financiers under n° GP 97 138 and registered with ORIAS (www.orias.fr) under no. 25003045 since 11/04/2025. Public Limited Company (Société Anonyme) with share capital of €3,871,680, RCS Paris n° 388 555 021, Crédit Mutuel Asset Management is a subsidiary of Groupe La Française, the asset management holding company of Crédit Mutuel Alliance Fédérale.