The Federal Open Market Committee kept the federal funds target range unchanged at 3.50% to 3.75% at 2 p.m. Eastern Time on June 17, 2026. The decision was widely expected, but the updated Summary of Economic Projections and dot plot delivered a firmer policy message in the first meeting led by new Fed Chair Kevin Warsh after succeeding Jerome Powell.
Inflation outlook for 2026 was revised sharply upward
According to the latest median projections, the Fed raised its 2026 forecast for personal consumption expenditures inflation from 2.7% in March to 3.6%. Core PCE was also lifted to 3.3%. On growth, the 2026 real GDP forecast was trimmed to 2.2%, while the unemployment rate projection held at 4.3%. Taken together, the numbers show a central bank that has become more cautious on disinflation while still viewing the U.S. economy as resilient.
The source article linked that change to recent geopolitical pressure, including conflict in the Middle East. Even with oil prices easing on hopes of peace between the U.S. and Iran, policymakers appear unwilling to assume that inflation risks have faded.
Dot plot shifts higher across the curve
The biggest signal for risk assets came from the rate path. A total of 18 officials submitted projections. The median year-end federal funds rate forecast for 2026 rose from 3.4% to 3.8%, while the 2027 median moved up from 3.1% to 3.6%. The longer-run rate projection, often treated as a proxy for the neutral rate, was also raised to 3.1%.
That shift suggests that even if rate cuts resume later, borrowing costs may stay elevated for longer than markets had previously priced in. The latest dot plot points to a slower easing cycle, not a quick return to ultra-low rates.
Warsh debut marks a more neutral policy stance
Warsh’s first post-meeting appearance drew added attention because of the change in policy language. The report said the Fed removed wording that had previously implied a looser bias toward “additional adjustments,” signaling a more neutral and cautious stance.
Before the decision, U.S. stocks were largely in wait-and-see mode, while Treasury yields fluctuated as expectations for cuts cooled. For bitcoin and the broader crypto market, both of which are sensitive to liquidity conditions, the updated projections keep macro pressure in place. The source did not provide immediate crypto price moves, but the policy revisions themselves point to a tougher near-term backdrop for risk assets.