Overview
- The Federal Open Market Committee voted unanimously to keep the federal funds rate at 3.50%–3.75% in Kevin Warsh’s first meeting, a decision made on Wednesday and announced after two days of deliberation.
- The Fed’s Summary of Economic Projections showed a split shift with nine of 18 officials now forecasting at least one quarter-point rate increase by year-end while Warsh chose not to submit his own projection.
- Warsh removed forward guidance from the post-meeting statement and sharply shortened the text, saying the Fed will rely on incoming data rather than hinting at future moves.
- He also launched five task forces to review Fed communications, the balance sheet, data sources, productivity and jobs measures, and the inflation framework, a move designed to reshape how policy is set and explained.
- Markets reacted by selling stocks and pushing short-term Treasury yields higher as attention turns to upcoming inflation and jobs reports; the shift follows a May CPI reading near 4.2% and energy-driven price pressures tied to the Middle East that have reversed earlier expectations of 2026 rate cuts.