The Fed will keep rates on hold this week. And Donald Trump will be furious about it.

That’s the short version. Read on for the exposition.

June’s FOMC gathering is, of course, an SEP meeting, which is to say the Fed will release new economic projections and a refreshed set of dots. The Committee’s macro forecasts are no better (and arguably worse) than any other macro forecasts and a dozen years on from its inception, the dot plot has a hard-won reputation for being worse than useless.

In my opinion (and I’m hardly alone) the Fed should stop publishing the SEP. It’s a liability, and the circumstances surrounding this month’s meeting testify to that characterization.

Most economists, including a majority of Fed officials, believe a sharply higher average US tariff rate will manifest sooner or later in higher consumer prices. Even in a benign scenario, that rate will be multiples of what it was prior to Trump’s second term, and with allowances for the possibility that exporters abroad may be willing to shoulder some of the burden, US importers bear a majority of the costs directly and they’ll generally seek to recoup those costs from consumers in the form of higher prices.

That should bias the PCE inflation projections higher in the SEP. Recall that they were marked up to 2.7% on the headline gauge and 2.8% on the core measure in the March projections from 2.5% in December. Some say the median projection in the new forecasts will reflect expectations for 3% underlying price growth.

But here’s the thing: The last three rounds of inflation data were benign, including CPI and PPI readings for May released last week. The Committee won’t (and shouldn’t) take much solace in those numbers given the distinct possibility they reflected, in part, the run-down of inventory stockpiled prior to the tariffs taking effect. But the optics of marking up the core inflation forecast in the presence of favorable realized inflation data leave something to be desired at a time when The White House is keen to paint the Committee (and particularly its Chair) as inimical to the MAGA agenda.

Similarly, the median dot may shift hawkish to reflect just one cut for 2025 versus two in the March SEP. Traders are still fully pricing a pair of reductions by year-end.

The familiar figure shows you the evolution of market pricing for 2025 Fed easing.

The tone of Trump’s Fed criticism is now so over-the-top as to be comical. In that regard, I’d note that his penchant for excoriating Powell is just like everything else to do with Trump: He’s normalized it such that we scarcely bat an eye.

Last week alone, Trump called Powell a “numbskull” (in front of an audience at The White House), JD Vance accused the Chair of “monetary malpractice” on social media and Howard Lutnick told Fox that Powell’s “got to do his job soon.” That’s the domestic political backdrop against which the Fed may mark its inflation forecasts higher and its projected rate path more hawkish.

If the new SEP does indeed reflect higher expected inflation and a shallower near-term easing trajectory, Trump’s likely to castigate the Fed in even harsher terms, thesaurus permitting.

One thing’s for sure: Powell will reinforce the notion that the next “live” meeting is September. He won’t say that explicitly — that is, he won’t preemptively declare July’s gathering pointless — but he’ll imply it.

Suffice to say this week’s proceedings are almost guaranteed to raise the temperature in the escalating feud between Trump and the man he chose to lead the Fed in 2018. As if the national temperature weren’t high enough already.