#Fed Meeting Minutes

On May 29, the Federal Reserve's meeting minutes mentioned that staff forecasts for real GDP growth in 2025 and 2026 are lower than those from the March meeting, as announced trade policies imply that real economic activity will be more significantly affected compared to the policies assumed in previous forecasts. The trade policies are also expected to lead to a slowdown in productivity growth, thereby dropping potential GDP growth in the coming years. As the drag on demand is expected to begin sooner and be larger than the supply response, the output gap is anticipated to widen significantly over the forecast period. The labor market is expected to weaken substantially, with the unemployment rate projected to be higher than staff estimates of the natural rate of unemployment by the end of this year and to remain above the natural rate until 2027.