Here's a comprehensive review of what happened during the **FOMC meeting on June 17, 2026**: --- ## **Key Decision** - The Federal Open Market Committee **held interest rates steady** at **3.5%–3.75%** in a **unanimous 12-0 vote**. - This was **Kevin Warsh's first meeting as Fed Chairman**, replacing Jerome Powell. --- ## **Dot Plot – The Hawkish Surprise** The most notable shift was in the Fed's "dot plot" (Summary of Economic Projections): - **Median 2026 year-end rate projection rose to 3.8%**, up from **3.4% in March** — implying at least one **25 basis point rate hike** later this year. - **Nine officials** now see at least one rate hike in 2026. - **Eight officials** see rates unchanged. - **One official** still sees a cut. - **Warsh himself abstained** from submitting a dot, calling the tool "not helpful in the conduct of policy." - Rate cuts have been **pushed out to 2027 and 2028**. --- ## **Revamped Policy Statement** Warsh dramatically **shortened the FOMC statement** from 341 words (April) to just **130 words**: - Removed language indicating a bias toward future rate cuts. - The statement emphasized: *"Inflation remains elevated relative to the Committee's 2 percent goal... The Committee will deliver price stability."* - Noted economic activity is expanding solidly, job gains are keeping pace, and productivity growth is strong. --- ## **Warsh's Five Task Forces** In his first major announcement, Warsh established **five task forces** to overhaul Fed operations: 1. **Communications** — reviewing how the Fed talks to the public 2. **Balance sheet** — examining the $6.7 trillion portfolio 3. **Data sources** — rethinking reliance on economic data 4. **Productivity, jobs, and AI** — studying transformative technologies 5. **Inflation frameworks** — re-evaluating how the Fed targets inflation --- ## **Inflation Forecasts Revised Higher** Officials significantly raised their inflation outlook for 2026: - **Headline inflation**: 3.6% (up from 2.7% in March) - **Core inflation**: 3.3% (up from 2.7% in March) - **GDP growth**: 2.2% (down 0.2 points from March) - **Unemployment**: 4.3% (down 0.1 points) - CPI in May was **4.2% YoY**; PCE was **3.8%** in April. --- ## **Market Reaction** - **Stocks fell** initially (S&P 500 down ~0.88% at its low) but **cut losses** as Warsh detailed his reform plans. - **Short-term rates jumped** on the hawkish dot plot. - **Traders now price a 60.7% chance of a rate hike in October**, compared to no rate increase expected before this meeting until December. --- ## **Warsh on Inflation & Politics** - Reiterated the Fed's **2% inflation target** is non-negotiable for now. - Said the Fed has "struggled to communicate its commitment to lower inflation" for five years and vowed to fix it. - Declined to say whether he's spoken with President Trump since taking the job, but emphasized Fed independence. --- **Bottom line:** The June 2026 FOMC meeting marked a **hawkish pivot** under new Chairman Warsh — rates were held steady, but the dot plot flipped from expecting cuts to signaling a possible hike, the statement was stripped down, and Warsh launched a sweeping review of Fed operations. Markets are now pricing in a **near coin-flip chance of a rate hike as early as October**.