Overview
- The Federal Open Market Committee voted unanimously to keep the target federal funds rate at 3.50%–3.75% in the Fed’s first policy meeting under Chair Kevin Warsh.
- The Fed’s Summary of Economic Projections showed nine of 18 policymakers expect at least one rate increase in 2026, marking a clear shift from March and opening the door to tightening later in the year.
- Warsh announced the end of formal forward guidance and the creation of five internal task forces, including teams on the central bank’s $6.7 trillion balance sheet and on communications, to reshape how policy is made and explained.
- The Fed said inflation remains elevated, projecting about 3.6% for the year and noting energy-price shocks from the Middle East have pushed prices higher, which complicates the choice between tighter policy and protecting jobs.
- Markets reacted to the Fed’s tougher tilt with U.S. stocks falling roughly 1%, and commentators highlighted political scrutiny because Warsh was nominated by President Trump who has pushed for lower rates.