The Federal Reserve concluded its meeting on June 17, 2026, with Chairman Kevin Warsh presiding for the first time. The Federal Open Market Committee (FOMC) voted unanimously to keep the benchmark overnight borrowing rate in the range of 3.5%-3.75%. This rate has remained unchanged since a reduction of three-quarters of a percentage point in late 2025. The committee removed previous language suggesting a bias toward future rate cuts and shortened its policy statement significantly from 341 words in April to 130 words this month.
The updated projections indicated that while a rate hike is possible, no cuts are expected this year, with any reductions pushed to 2027 and 2028. The dot plot, which reflects participants' expectations, showed a median funds rate projection of 3.8% by the end of 2026. The FOMC also raised its inflation outlook for 2026 to 3.6% for headline inflation and 3.3% for core inflation, while slightly lowering GDP growth projections to 2.2%.
Warsh has been critical of the Fed's forecasting tools and has not participated in the Summary of Economic Projections, which has led to speculation about potential changes in the committee's approach. The statement emphasized the Fed's commitment to controlling inflation, which remains above the target of 2%. Recent economic indicators, including a 4.2% annual inflation rate and stable job growth, have complicated the decision-making process regarding interest rates.