Fed Holds at 3.50–3.75% (12–0); Dot Plot Flips to Hikes; PCE Seen 3.6%
FOMC June 17: held 3.50–3.75% (12–0); dot plot flips from a cut to hikes (9 of 18 see ≥1); PCE 3.6%, unemployment 4.3%, GDP 2.2%; Warsh’s first meeting.
TL;DR — The Federal Reserve held interest rates at 3.50%–3.75% at Kevin Warsh’s first meeting as chair (June 17, 2026) but flipped its "dot plot" toward hikes, with half of officials now projecting at least one increase by year-end amid higher inflation forecasts.
The FOMC announced its decision on June 17, 2026, Kevin Warsh’s first meeting as chair. The substance:
The decision
The Federal Reserve held its benchmark rate at 3.50%–3.75% in a unanimous 12–0 vote at Kevin Warsh’s first meeting as chair. But the "dot plot" flipped: where March’s projections implied a cut, June’s implied net hikes, with 9 of 18 officials projecting at least one increase by year-end. Forecasts turned more hawkish — PCE inflation revised up to 3.6%, unemployment 4.3%, real GDP 2.2%.
| March | June | |
|---|---|---|
| Policy signal | implied cut | implied hike |
| PCE inflation | lower | 3.6% |
| Rate (held) | — | 3.50–3.75% |
What they said
"We recognize that inflation has been running well ahead of the Fed’s long-stated inflation goal of 2%." — Kevin Warsh, Chair, Federal Reserve
Why it matters
- A regime change. Warsh’s Fed reads as more hawkish than the prior Powell-era guidance.
- Markets repriced. Traders moved to price an October hike rather than cuts.
- Inflation is the worry again. Upgraded price forecasts drove the shift.
FAQ
What did the Fed decide in June 2026?
It held its benchmark rate at 3.50%–3.75% in a unanimous 12–0 vote on June 17, 2026 — Kevin Warsh’s first meeting as chair — but shifted its dot plot toward hikes, with 9 of 18 officials projecting at least one increase by year-end.
Why is this seen as a hawkish shift?
In March, the Fed’s projections implied a rate cut; in June they implied hikes, alongside higher inflation forecasts (PCE revised up to 3.6%). Markets responded by pricing in a potential October increase.
Sources
Image: Kevin Warsh (Federal Reserve) by Federal Reserve — Public domain, via Wikimedia Commons.
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