The Fed also forecasted two quarter-point interest-rate cuts over the remainder of 2025, carrying over a prediction issued in March. Two additional quarter-point cuts will be made in 2026, as well as one quarter-point cut in 2027, the central bank said.

The Fed, helmed by Chair Jerome Powell, is expected to hold rates steady this month despite pressure from President Donald Trump to make cuts.

President Trump has increasingly pointed to rate cuts by other central banks as he pressures Jerome H. Powell, the Fed chair, to reduce borrowing costs.