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The Federal Reserve raised its inflation forecast for 2025 to 3%, citing uncertainty from President Trump's trade policies and geopolitical risks. The core personal consumption expenditures price index is expected to rise to 3.1%, up from a previous forecast of 2.8%. GDP growth is projected to slow to 1.4%. Fed Chair Jerome Powell linked the inflation increase to tariffs, stating that their costs ultimately fall on consumers. Despite this, the Fed still anticipates two rate cuts this year, although fewer members support rate cuts compared to March.

Prepared by Christopher Adams and reviewed by editorial team.