Overview
- The Federal Open Market Committee voted unanimously to keep the federal funds target at 3.50%–3.75% at the June 17 meeting while stripping language that had implied future easing.
- Chair Kevin Warsh announced five internal task forces to review communications, the Fed’s balance sheet, the data it uses, productivity and jobs, and the policy framework.
- Warsh declined to submit his own interest‑rate projection and the committee’s Summary of Economic Projections showed a median year‑end 2026 rate of 3.8% with nine of 18 officials now expecting a hike in 2026.
- Markets reacted quickly with the two‑year Treasury yield jumping about 14 basis points, the 10‑year rising, and major stock indexes and Bitcoin falling as traders moved to price a later‑2026 rate increase.
- Broader context: persistent inflation running in the high‑3 percent range and an Iran‑linked energy shock have strengthened the case for a firmer Fed stance, and Warsh’s push to shrink the roughly $6.7 trillion balance sheet could raise borrowing costs for households and businesses if implemented.