Overview
- The Federal Open Market Committee left the federal funds rate at 3.50%–3.75% last week in a 9-3 vote, with Beth Hammack, Neel Kashkari and Lorie Logan dissenting because they preferred a 25 basis point increase.
- Chair Kevin Warsh has cut back on forward guidance, meaning the Fed will give less public detail about its expected interest‑rate path and will rely more on how markets move and internal reviews to inform policy.
- Several Fed officials including Minneapolis Fed President Neel Kashkari and Governor Lisa Cook publicly said they are prepared to start gradual rate increases if incoming data do not show sustained disinflation.
- Markets have reacted to the communication shift and external pressures by pushing 10‑ and 30‑year Treasury yields to multi‑year highs, which raises borrowing costs for mortgages and government debt.
- Warsh has created task forces, including one on AI and productivity, that he argues could ease inflation over time, but officials warn that inflation readings, Treasury auctions and Middle East or fiscal shocks will determine the next moves.