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 Bank of England has been slowly reducing borrowing costs since the middle of last year, but inflation is still well above target.

Officials are waiting to see if businesses manage higher costs from tariffs by trimming profits or pushing up prices.