Overview
- At the ECB Forum in Sintra on July 1, Fed Chair Kevin Warsh said he will not give forward guidance and reaffirmed the Fed’s 2% price‑stability target.
- Warsh kept the FOMC’s dot plot as a public forecasting tool but declined to submit his own projection and ordered five task forces to review Fed communications, the balance sheet and data practices.
- The June 16–17 FOMC dot plot showed a median 2026 policy rate of 3.8 percent with nine of 18 officials expecting at least one hike, a signal that contrasts with Warsh’s public reticence.
- Markets have reacted by repricing odds for near‑term moves and moving money across Treasuries, equities, gold and crypto, and traders are now relying more on incoming data to set expectations.
- The outlook is more uncertain after the June jobs report showed only 57,000 payroll gains, and that weaker labor reading together with persistent above‑target inflation, oil swings and rapid AI investment leaves the Fed balancing price stability and employment.