Fed chair Kevin Warsh, at his first meeting of the Open Market Committee, kept the rate unchanged but surprised markets with a hawkish stance: nine of the 18 participants voted to raise the rate in 2026, and the inclination toward easing policy disappeared from the statement.

The Federal Reserve left the key rate range unchanged at 3.50%–3.75% on June 17, 2026 — already the fourth meeting in a row without changes, which markets had fully expected.

The statement: a shift to a neutral tone

In the document the Fed no longer mentions «supportive rate changes» and emphasizes a neutral approach fully dependent on incoming data.

This is a notable reversal against the backdrop of persistent inflation, which is holding above 4.2% on an annual basis.

Now nine of the 18 FOMC participants forecast at least one rate hike in 2026 — earlier the majority leaned toward a cut or at least toward keeping the level unchanged.

«One dot is missing — most likely it is Warsh's own vote», noted ZeroHedge in its post.

This signal is also confirmed by Citadel Securities' forecast of a growing probability of a rate hike as soon as September, against the backdrop of a strong labor market, high demand, supply disruptions and rising investment in the artificial intelligence sector.

Warsh's debut: close market attention

At his first press conference Warsh stressed that he envisions a «more restrained» Fed and a reduction in the volume of forward guidance for the market.

Fidelity analysts warned of possible volatility in the debt market because of the unpredictability of the tone of communications, and markets reacted with rising Treasury yields and a strengthening dollar.

Such a decision dashes hopes for a soft approach that had been associated with Warsh's arrival, and underscores that the committee intends to control inflation as carefully as possible.

Source: BeInCrypto