Summer of Uncertainty: the June FOMC meeting and the One Big Beautiful Bill

The Federal Open Market Committee (FOMC) met this week to report on dampened economic projections, forecast two potential rate cuts in the remainder of the year, and reaffirm the wait-and-see approach that has been a hallmark of Fed policy thus far in 2025. Our experts analyze what came out of the meeting, how investors should respond, and what the future may hold. We also break down the key provisions in the One Big Beautiful Bill Act as passed by the U.S. House of Representatives, what comes next in the Senate, and highlight four provisions that may impact you.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Cynthia Honcharenko, Director of Fixed Income Portfolio Management
Joe Velkos, National Tax Director, Key Wealth

02:12 – The Census Bureau’s Advance Retail Sales Report showed a 0.9% month-over-month dip in May, and April figures were revised to a 0.1% decline.

03:12 – U.S. industrial production fell by 0.2% in May, according to the Federal Reserve. 

03:54 – At this week’s FOMC meeting, the Fed kept the federal funds rate unchanged at a target range of 4.25% to 4.50%.

04:07 – We look at key economic projections, including a lowered GDP growth median, higher inflation projections, and increased unemployment forecasts. 

05:03 – The median FOMC forecast sees two 25 basis points cuts in 2025, though there appears to be disagreement among members with some expecting no rate cuts in 2025, while others expect only a single 25 basis points cut this year.

06:10 – The markets and analysts weigh in on the probability of rate cuts this year. Fed Chair Jerome Powell remains cautious and confirmed the Fed is positioned to respond as needed, especially considering uncertainty around the impact of upcoming tariffs on inflation.

10:45 – A discussion on who might succeed Jerome Powell as the next Chair of the Federal Reserve.

12:54 – Uncertainty across several fronts signals a wide range of possible outcomes in international and domestic markets and politics. For investors’ portfolios, diversification will be as important as it’s ever been.

15:14 – Joe Velkos, National Tax Director for Key Wealth, joins us to walk through the “One Big Beautiful Bill” passed by the House of Representatives on May 22.

19:07 – The bill faces opposition in the Senate, including among Republicans, making it unlikely that the bill will remain unchanged or that it will be passed before July 4th, as is President Trump’s goal.

20:18 – We highlight four key provisions of the bill: an increase to the maximum state local tax deduction, an increase to the lifetime gift and estate tax exemption, restoring the bonus depreciation for business owners, and the new proposed elimination of tax on tips and overtime pay.

 

Additional Resources

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