US FOMC Economic Projections

The Federal Reserve held the policy rate steady at 3.50%–3.75% at its June meeting – an outcome that was never really in doubt. The more interesting signals came from the Summary of Economic Projections (SEP), the policy statement, and Chair Kevin Warsh’s first press conference, which may prove to be his most substantial. The statement was simplified and stripped of forward guidance, while the SEP showed a committee roughly split between holding rates steady for the remainder of the year and hiking at least once, a hawkish shift ...

As widely expected, the FOMC kept the target range for the federal funds rate unchanged at 3.50- 3.75% and dropped its easing bias. However, this decision was announced in an unusually short statement. The decision was unanimous, with Miran – who repeatedly dissented because he wanted to cut – was replaced by Warsh. The press conference was a clear break from in the Bernanke-Yellen-Powell era, with Warsh making an end to forward guidance. The statement was so short, that we replicate it here: The Federal Open Market Committee ...

While it will be difficult to separate intent from unintended consequences perhaps to be revisited in subsequent communications, Kevin Warsh’s grand entrance drove the bond market to rebel, pushed stocks lower and drove a stronger dollar. Gone is the steady hand on the tiller that avoids game day surprises. Either a deliberately new hawkish and more volatile era is upon us, or a hawkish bias for now is designed to establish initial credibility and buy time before five announced taskforces report back, or the Chair is learning on the ...

The Federal Reserve's latest "dot plot," outlining policymakers' interest rate projections, revealed a sharp shift in central bankers' expectations. Not only are rate cuts almost surely off the table for the rest of the year, but there is also a sharply higher chance of a hike before the end of 2026. Nine policymakers who participated in the exercise projected at least one hike, with six even suggesting multiple hikes could be in the offing.

The Federal Reserve System is the central bank of the United States. It performs five general functions to promote the effective operation of the U.S. economy and, more generally, the public interest. The Federal Reserve conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy; promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the U.S. and abroad; promotes the ...

The Federal Reserve is expected to hold interest rates steady on Wednesday at the end of the first meeting chaired by Kevin Warsh, with a new policy statement and economic projections likely to reflect growing concern about the inflation stoked by the Iran war even as oil prices slide on peace deal hopes. With recent data showing strong U.S. hiring, a relatively low 4.3% unemployment rate, and inflation well above the U.S. central bank’s 2% target, many analysts anticipate the Fed will remove language from its policy statement about ...