Fed holds 3.50–3.75% for a fourth meeting, reinforcing ‘higher-for-longer’ outlook

The Federal Reserve held its benchmark rate at 3.50–3.75% for a fourth consecutive meeting in June and raised the probability of a rate hike later this year to 50%. It also lifted its inflation outlook while lowering its GDP growth forecast. After the decision, U.S. Treasury yields jumped and Big Tech shares fell, with Microsoft, Meta, Alphabet and Amazon closing lower. The move reinforced expectations of higher rates for longer, weighing directly on valuations of long-duration growth stocks.