Only two Fed participants voiced support for a rate cut at the July meeting. 
Minutes of the Federal Open Market Committee
Please consider the Minutes of the Federal Open Market Committee June 17–18, 2025, released today.
Four Key Points
- Participants noted that the available data showed that economic growth was solid and the unemployment rate was low. Participants observed that inflation had come down but remained somewhat elevated.
- Participants judged that there were downside risks to employment and economic activity and upside risks to inflation, but that these risks had decreased as expectations about effective tariff rates and their effects had declined from levels in April.
- A couple of participants noted that, if the data evolve in line with their expectations, they would be open to considering a reduction in the target range for the policy rate as soon as at the next meeting.
- Some participants saw the most likely appropriate path of monetary policy as involving no reductions in the target range for the federal funds rate this year.
CME Fedwatch Expectations
Rate cut expectations based on futures trading were little changed today.
The odds of a rate cut on July 30 are 6.7 percent today up from 6.2 percent yesterday.
September is also little changed. Odds of at least one cut in September are 68.3 percent today, up from 64.6 percent yesterday.
There is no Fed meeting in August.
I Officially Announce my Availability to Become the Next Fed Chair
Earlier today, I commented I Officially Announce my Availability to Become the Next Fed Chair
I have a 15-point plan. Here are the first 5.
Mish’s 15-Point Fed Plan
- Explain to the nation why we don’t need a Fed and how independent central banks have created boom-bust cycles of increasing amplitude over time. The main corollary is history shows the one thing worse than independent central banks is a central bank run by politicians, frequently ending in hyperinflation.
- Surround myself with qualified insiders who understand the Fed but also believe in the mission to end the Fed.
- Stop paying interest on reserves, phased in over 18 months.
- Wind down the Fed’s balance sheet totally in 2-3 years.
- Require that assets available on demand such as checking and savings accounts are truly available on demand. That means demand deposits are parked in overnight US treasuries. This would be phased in over two years. As a result, we would have genuine safekeeping banks.
Related Posts
April 1, 2025: Fed Interest Rate and QE Policy Mistakes in Pictures and Silly Fed Comments
When you are clueless about inflation you cannot possibly get policy right. The tendency is to overshoot in both directions creating asset bubbles of increasing amplitude over time.
June 20, 2025: Did the Fed Just Predict a Recession for Later this Year?
The Fed does not “predict”, but its GDP projections say “yes”.
June 25, 2025: Trump Says Powell Has “Low IQ”, Mentions 3 or 4 Possible Replacements
Trump is on a very foolish mission to “Pack the Fed”.
Hello Jerome Powell, Is Everything Under Control?
On January 31, 2025, I asked Dear Jerome Powell, Is Everything Under Control?
Gold does not believe the Fed has things under control and neither do I.
I will unpack the Fed by ending it.
The last time the Fed cut rates, the yields on the 10- and 30-year Treasuries exploded higher.
Powell is not in a hurry to put his finger on that red hot stove again.
We will need a recession to justify lower rates and it is hard to imagine a recession occurring when the Federal Government is running $2.5 TRILLION annual deficits.
It rook about two years before inflation hit during Trumps last nightmare term. I do not expect it to take that long this time ~ given his track record of financial disasters.
A strong leader would not need artificially low interest rates to keep the economy going nor would he need constant war and a blown out budget.
Many of us knew Trump would be bad, but not this bad!
<
Revised for September FMOC Meeting:
SomeAlmost all participantssawsee the most likely appropriate path of monetary policy as involving no reductions in the target range for the federal funds rate this year.Looking forward to that 63.9% Sept rate cut probability dropping down to near zero. When will core inflation get to 3%, that’s what I want to know.
Treasuries provide collateral. The more collateral, the more borrowing money out of thin air that can exist.
Real Estate has provided much of the necessary collateral in recent times, but Real Estate deals are tanking. Fabricated money out of thin air has to be collateralized from somewhere, and ever increasing treasuries provide that collateral.
It is never wholely about the return from interest, but more important to have collateral to hypothecate new money out of thin air.
It is an alchemists dream. Straw is no longer necessary to spin into Gold. All that is necessary is air.
Look at what the Japanese did in the 80s by collateralizing real estate. It is a miracle until it isn’t.
It is nothing more than a reverse Rumplestilskin effect, with a little Goldilocks and the three bears to provide cover.
Real estate is always mark to my imagination rather than mark to market. Ask Trump about this, he stood trial for using his imagination.
Taco has bills to pay, being sued ain’t cheap! Lower the rates so you’re savior can afford to pay.
And why exactly does the Fed need to cut interest rates which are only at a little over 4%? Why do we need another debt orgy, another asset transfer from ordinary people to Black Rock and Vanguard with free money, and why do we need to screw everyone in cash especially seniors? Why isn’t this president encouraging people and incenting them to save money?
– And why exactly does the Fed need to cut interest rates which are only at a little over 4%?
> Since 2012 “The Fed” has had an “Established an Explicit” Inflation Target of 2%. This is partly why Trump is so pissed they are not fulfilling there own mandate.
– Why do we need another debt orgy, another asset transfer from ordinary people to Black Rock and Vanguard with free money.
> This is the point of 2%, as it has been deemed by the Fed for quite sometime now, that the “Explicit Mandate” allows for “Maximum Employment & Price Stability” there words not mine.
– and why do we need to screw everyone in cash especially seniors?
> This issue is much bigger than the 2% Mandate.
– Why isn’t this president encouraging people and incenting them to save money?
> That’s what one of His primary Goals is with Tariffs. To assist Americans with Savings, as well as making ends meet. He is creating investments by other Countries in America, and this too will allow More Americans to save more, as more jobs become available. More Service related Jibs will be needed Etc. He’s at least not sitting on His Hands!! Let’s see what happens, I am very optimistic more good than bad will come out in the end of it all…
The FED and all central bankers are caught in a trap of their own making.
After decade of ZIRP, created everything bubble. Have to juggle the stock market, too: all pension funds have invested in it.
You know the answer, it’s because Trump is bought and paid for, and all he gets to do is be the playground bully using the OO to grind his axe.
Clearly the Fed is already lower than the market is indicating rates should be.
Fates may well rise if the Fed cuts again and prematurely with clear signs of inflation/stagflation on the horizon.
<
If short term rates drop, that will reduce the amount of interest payments by the USG since a majority of debt is financed at short term rates.
Debt held by the public went up more than $100 billion each on Monday and Tuesday, makes one wonder how the OBBBA could be signed on a holiday Friday and over the weekend the government got the public to prepared to open their collective wallet so fast, or was it the FED as treasury auctions were roughly in line for debt rollover, not new debt additions. I do not understand. Next couple fed balance sheet reports might be telling. Maybe our new Fed Chair nominee can comment.
Or not?
If you desire low interest rates you just hold the money stock constant for a long time, like Bernanke did.
I don’t get it. The path from money to inflation was textbook in C-19. Nothing’s changed in 100 + years.
Note The original National Bank Act of 1863 did not allow national banks to make loans secured by real estate.
Next May’s minutes will show that Hassett paused the meeting to call the White House to find out what interest rates will be. Sorry Mike, you will need a spine-ectomy in order to be eligible to be the future Fed Chair.