Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the June 18, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the June 18TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
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Here's a clip from prepared remarks by Fed Governor Dr. Adriana D. Kugler, at the International Economic Symposium, hosted by the Central Bank of Ireland, in Dublin:
Third FOMC Monetary Policy Meeting of 2025 Adjourned: United States Prime Rate Remains At 7.50%
United States Prime Rate
The Federal Open Market Committee (FOMC)
of the Federal Reserve System has just adjourned its third monetary
policy meeting of 2025 and, in accordance with our latest forecast, has voted to leave the benchmark target range for the federal funds rate at 4.50% - 4.75% to 4.25% - 4.50%. Therefore, the United States Prime Rate (a.k.a the Fed Prime Rate) holds at 7.50%. NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)
Here's a clip from today's FOMC press release(note text in bold):
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Alberto G. Musalem; and Christopher J. Waller. Neel Kashkari voted as an alternate member at this meeting..."
Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
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Here's a quote from Fed Chair Jerome Powell from his April 4th speech at the Economic Club of Chicago...
“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
Odds Now At 70% (Somewhat Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 70% (somewhat likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
"...The
biggest winners from the tariffs, [Ford CEOJim Farley] suggested, won’t be domestic
automakers but Asian rivals that would face little additional impact..."
"...With
25% increases in the cost of parts, inflation would surge in
maintenance and repair and insurance, which vehicle owners are already
struggling to handle..."
Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
"...Given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.'..."
Two percent is too generous.
The repercussions from #POTUS47's tariffs, and layoffs from DOGE, have yet to be fully felt in the American economy.
Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Continue at 7.50% After the March 19, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the March 19TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
======= Consumer Price Index (CPI) at 3.00% Last Month (Y-o-Y).
"...Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail money-market funds (MMFs) less IRA and Keogh balances at MMFs.
Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1..."
Odds Now At 80% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the March 19, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 80% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the March 19TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
"Economists at Bank of America warned this week that the U.S. housing market is 'stuck and we are not convinced it will become unstuck' until 2026 -- or later..."
Odds Now At 90% (Likely) The U.S. Prime Rate Will Hold at 7.50% After the January 29, 2025 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to keep the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the January 29TH, 2025monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.
"...Broadly speaking, consumers believe that the economy has improved considerably as inflation has slowed, but they do not feel that they are thriving..."
Month-on-month, the ICS was +3.06%, while year-on-year it was +6.07%.
Consumer Confidence declined by 7.18% this month (December, 2024.) Here's a clip:
"...Consumers became a bit less bullish about the stock market in December: 52.9% expected stock prices to increase over the year ahead, down from a record high of 57.2% in November. Also, 25% of consumers expected stock prices to decline, up from 21.7%. The share of consumers expecting higher interest rates
over the next 12 months ticked up to 48.5% but remained near recent
lows. The share expecting lower rates eased to 29.3% -- down from recent
months but still quite high..."
Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Be Cut to 7.50% at the December 18, 2024 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 0.25 percentage point (25 basis points [bps]) atthe December 18TH, 2024monetary policy meeting.
A 25 bps cut would cause Prime to decrease, from the current 7.75%, to 7.50%.
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Year-on-year (Y-O-Y), the CORE Consumer Price Index edged lower, from 3.33% during October, to 3.32%during November, 2024.
Y-O-Y, from September to October, 2024, the CORE PCE Price Index rose from 2.7% to 2.8%.
Federal Open Market Committee (FOMC) Monetary Policy Meeting Schedule for 2025 & 2026
👇: Here's the Federal Open Market Committee (FOMC) monetary policy meeting schedule for 2025 and 2026.
Why is this schedule important to you? Because it's at these monetary
policy meetings that the FOMC votes on whether to raise, lower or make
no changes to the target range for Fed Funds Target Rate, and when the Fed Funds Target
Rate changes, the United States Prime Rate (also known as the Fed Prime
Rate) will also change (how the United States Prime Rate works):
Odds Now At 60% (On The Fence) The U.S. Prime Rate Will Be Cut to 7.50% at the December 18, 2024 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 60% (on the fence) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 0.25 percentage point (25 basis points [bps]) atthe December 18TH, 2024monetary policy meeting.
A 25 bps cut would cause Prime to decrease, from the current 7.75%, to 7.50%.
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Year-on-year (Y-O-Y), the CORE PCE Price Index moved sideways from August to September -- 2.7% to 2.7%.
Y-O-Y, from August to September, the PCE Price Index eased, from 2.3% to 2.1%.
Odds Now At 99% (VERY LIKELY) The U.S. Prime Rate Will Be Cut By At Least 25 Basis Points (0.25 Percentage Point) at the November 7, 2024 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 99% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the cardinal target range for the fed funds rate (TRFFR) by at least 0.25 percentage point (25 basis points [bps]) atthe November 7TH, 2024monetary policy meeting.
A 25 bps cut would cause Prime to decrease, from the current 8.00%, to 7.75%.
A 50 bps cut would lower the TRFFR to a range of 4.25% - 4.50%, and would result in a Prime Rate of 7.50%, a level not seen since December of 2022.
Odds Now At 95% (VERY LIKELY) The U.S. Prime Rate Will Be Cut By At Least 25 Basis Points (0.25 Percentage Point) at the September 18, 2024 FOMC Monetary Policy Meeting
Prime Rate Prediction
Prime Rate Forecast
As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) will vote to LOWER the benchmark target range for the fed funds rate (TRFFR) by at least 25 basis points (bps) atthe September 18TH, 2024monetary policy meeting.
If a 25 bps cut happens, the United States Prime Rate (a.k.a Fed Prime Rate) would decline from the current 8.50%, to 8.25%.
There is also a very real chance that the FOMC will cut by 50 bps next month, setting the TRFFR at4.75% - 5.00%. This would result in a U.S. Prime Rate of 8.00%, a level not seen since March of 2023.
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