“The economy has been resilient and part of that is our stance, and we think we’re in a good place on that to respond to significant economic developments… Pretty much, that’s all that matters to us.”
Powell faced further criticism from the Trump administration after the Fed’s decision to hold rates steady, including from Federal Housing Finance Agency (FHFA) director Bill Pulte who called on X for his resignation as chair.
Two-year Treasury yields – which are especially sensitive to the immediate aftermath of news from the Fed – ticked upwards after Powell warned that tariff and inflation risks hadn’t eased.
Markets also reacted negatively to the Fed’s so-called “dot plot,” which illustrates Committee members’ thinking on the economic outlook. While two Fed rate cuts before the end of the year are still possible, decisionmakers now expect one less cut in 2026 and one less in 2027 – meaning rates will likely fall by a total of 100 basis points before the Fed calls it quits.
Watch Chair Powell’s statement from the #FOMC press conference:
Intro clip: https://t.co/10z8JQ6tvO
Full video: https://t.co/0YLymtGT5M
Press conference materials: https://t.co/lQAMHJpr6T
— Federal Reserve (@federalreserve) June 18, 2025
Fed stance finds mortgage industry support
The Fed’s hawkishness might mean the economy stays tightly wrapped for longer than expected, but it’ll be vindicated in that approach if it keeps inflation in check, according to Melissa Cohn (pictured below), regional vice president at William Raveis Mortgage.