Fed Set to Hold Rates at Warsh’s First FOMC Meeting on June 17

The Federal Reserve is all but certain to keep its benchmark interest rate unchanged at 3.50% to 3.75% at the June 16-17 FOMC meeting, the first under newly installed Chair Kevin Warsh. CME FedWatch futures price a 97.4% probability of a hold. A Reuters poll of 102 economists found that 72 expect no change at this meeting or for the rest of 2026.

Warsh was confirmed by the Senate on May 13 in a 54-45 vote and sworn in on May 22, replacing Jerome Powell after a turbulent confirmation fight that included a Justice Department investigation of the central bank. The consequential questions sit with the language the new chair chooses and the dot plot he inherits, because that text will tell markets whether the Fed’s next move is a cut or a hike. The shift in expectations has been unusually fast: about a third of economists forecast a hold at the start of 2026, just under half did in May, and nearly 70% do now.

Warsh Takes the Chair With a Hold Already Priced In

Kevin Warsh became the 17th chair of the Federal Reserve on May 22, 2026, after the FOMC unanimously selected him the same day he took the oath of office. The transition was confirmed in the Federal Reserve’s announcement of Warsh’s oath of office, the official record of the swearing-in. The meeting on June 16-17 will be his first as chair, and the market has already priced in what it expects him to do.

CME FedWatch futures, the most-watched futures-based gauge of FOMC expectations, showed a 97.4% probability of no rate change at the June 17 decision. That is up from 95.4% earlier in the month, with a Polymarket reading of 99.3% on $72.1 million in trading volume.

The Reuters poll conducted June 4-9 found that 72 of 102 economists expect the federal funds rate to stay in its current 3.50% to 3.75% range through December, and none expect a cut at the June meeting itself. The Fed has held that range since December 2025, with no change at any of the four FOMC meetings since. A May jobs report added 172,000 positions, giving the central bank more room to wait. The PCE inflation gauge, the Fed’s preferred measure, sat at 3.8% in April, on the same trajectory the 54-45 Senate vote that installed Warsh had to weigh.

• 97.4% probability of a June hold (CME FedWatch)
• 3.50%-3.75% current federal funds target range (held since December 2025)
• 72 of 102 economists see no change in 2026 (Reuters poll, June 4-9)
• 172,000 jobs added in May (U.S. Bureau of Labor Statistics, per Reuters)
• 3.8% year-on-year PCE inflation in April (Commerce Department)

A 97% Consensus: Why No Economist Expects a Cut

No economist in the June 4-9 Reuters poll of 102 forecasters predicted a rate cut at the conclusion of the FOMC’s June 16-17 meeting. The survey, detailed in the Reuters poll of 102 economists conducted June 4-9, is the strongest convergence yet this year on a no-change path. The share predicting no move through year-end has climbed from about a third of economists at the start of 2026 to nearly 70% in the latest poll.

The split inside the poll is clear: 72 of 102 expect a hold through December, with the remainder looking for a cut later in 2026 or a hike. Rate futures have gone a step further, pricing in at least one rate hike by end-2026. Wells Fargo chief economist Tom Porcelli, one of the forecasters quoted in the survey, pointed to the Iran conflict as the only realistic path to a cut. Porcelli said there is no sign of a near-term resolution to that conflict.

It’s going to be very hard for the Fed to justify any action at this point and in the foreseeable future. It will be incredibly difficult to get a consensus of Fed officials to go along with the idea of cutting rates.

Tom Porcelli, chief economist at Wells Fargo, in the Reuters poll of 102 economists.

Inflation Now Roughly Doubles the Fed’s 2% Target

Inflation is running at roughly double the Fed’s 2% target on the central bank’s preferred gauges, the highest readings in nearly three years. The four main measures all sit well above where policymakers want them. A Reuters poll of economists shows the gap is expected to widen before it closes.

Headline PCE rose to 3.8% year-on-year in April, the highest reading since May 2023. Core PCE sat at 3.3% in the same month. Headline CPI came in at 3.8% in April, with core CPI at 2.8%. All four readings sit a full percentage point or more above the Fed’s 2% goal.

The May CPI report, due June 10, is widely expected to show another step up. A separate Reuters survey projects headline CPI at 4.2% year-on-year for May and core CPI at 2.9%, both above the Fed’s 2% target.

PCE inflation is forecast to average 3.9% in the second quarter, 3.8% in the third, and 3.6% in the fourth, per the same poll. The Council on Foreign Relations’ look at Warsh’s first 100 days notes the U.S. economy is in its fifth consecutive year of inflation above the Fed’s 2% target, with cumulative price increases approaching 25%. Stubborn demand and tariff-driven goods inflation have left the central bank working against a backdrop it has been trying to look past.

The Iran War Reset the Disinflation Story

The single biggest driver of the inflation reacceleration is the war in the Middle East. The US-Israel-Iran conflict broke out at the end of February, sent oil prices sharply higher, and stoked inflation fears that have only deepened since.

Iran-related attacks on tanker traffic in the Strait of Hormuz, the narrow waterway that handles a large share of global oil shipments, have pushed crude and gasoline prices higher. The result is an energy-driven price shock layered on top of an economy that was already running above the Fed’s 2% target. April gasoline prices jumped 5.5% on the month, with goods prices up 0.7% and services prices up 0.3%. Mortgage Professional America’s read on the same Reuters poll frames the conflict as the key reason economists have dropped their earlier “transitory” calls.

Most economists in the June Reuters poll had earlier described the inflation pulse as transitory; the June survey shows that view collapsing. “Supply shocks should be one-off and transitory. But if we start getting them in sequences that might start shifting inflation expectations in a way we wouldn’t normally expect,” said Eli Nir, U.S. economist at TD Securities. Nir added that the Fed was wrong on the 2022 post-Ukraine shock, “and we were all wrong at that point,” a reference to one of the most aggressive tightening cycles on record.

Warsh’s Three-Point Overhaul Hits on Day One

Warsh has used his confirmation hearing and his first weeks in office to outline a “regime change” at the Fed. The chair’s priorities fall into three broad areas, and each one will leave a fingerprint on Wednesday’s statement. The FOMC’s press conference will be the first chance to see how those priorities translate into policy language. The June meeting also publishes an updated quarterly dot plot, the first under Warsh.

Fed Governor Christopher Waller, speaking at a Frankfurt conference on May 22, gave the clearest signal yet of how the statement itself will change. Waller said he would support removing the easing bias from the FOMC’s policy statement to make it clear that a rate cut is no more likely in the future than a rate increase, while stopping short of calling for a near-term hike.

Forbes’ read on the expected shift away from the easing bias noted Waller’s remarks aligned the Fed’s policy guidance with the hold view Wall Street had been pricing. Most forecasters expect the dot plot to signal steady rates through 2026, with a small but visible number of participants marking higher. At the April 28-29 FOMC meeting, three members of the committee already hinted their next move could as easily be a rate increase as a cut.

The list of priorities, drawn from Warsh’s confirmation record, gives the clearest read on what changes next. Each item maps to a specific change in how the central bank will communicate from this week forward:

1. Reinforce the Fed’s core mandate of price stability and maximum employment, pulling the institution out of areas Warsh views as outside its statutory remit.
2. Overhaul inflation targeting by reverting to a strict 2% goal and reassessing how inflation is measured, including newer methodologies.
3. End forward guidance, a practice Warsh has criticized as making policymakers too reluctant to change course; the dot plot could become a relic.

Inside the Fed, the Hawkish Wing Is Growing Louder

Warsh chairs a 19-member Federal Open Market Committee that has grown visibly more hawkish since the Iran war began. None of those officials is gearing up for a rate hike immediately, and the Fed may still hold rates steady all year, but more of them are talking about the risk of eventual hikes. The shift in tone is the backdrop for the new chair’s first press conference.

Cleveland Fed President Beth Hammack said Tuesday that it may soon be appropriate to act if recent trends continue, noting the U.S. economy is entering its sixth year of elevated inflation. Dallas Fed President Lorie Logan said Wednesday that she is increasingly concerned that higher interest rates could be necessary later this year to fully restore price stability. Kansas City Fed President Jeffrey Schmid said late last week that now is not the time to let down our guard and that the Fed needs to signal its willingness to take the actions necessary to bring inflation back to 2%.

New York Fed President John Williams pushed back, calling the policy rate in a very good place to go up or down as the economy warrants. Investopedia’s read on the FOMC’s hawkish drift before the June meeting noted that Fed Governor Michelle Bowman and Waller, who had both been open to cuts earlier, are now also flagging inflation risks.

A hawkish recalibration indeed is underway. Rate cuts are no longer part of the conversation. Rate hikes are.

Ed Yardeni, president of Yardeni Research, in a note cited by Investopedia.

What a Hold Means for Mortgages, Crypto and the Dollar

A pause that lasts through 2026 reshapes the math for households and markets in several ways at once. Mortgage rates, which had drifted lower on cut expectations earlier in 2026, have climbed back as those bets were unwound, and the 30-year fixed has settled into a 6-7% range. The dollar has held firm as the U.S. rate-cut story has faded.

The personal savings rate fell to 2.6% in April, the lowest since June 2022, even as consumer spending rose 0.5% on the month. Q1 GDP was revised down to 1.6% annualized, below the initial 2% estimate. Forecasts in the Reuters poll put the unemployment rate around 4.3% and average annual U.S. growth about 2% for the coming years. The next FOMC decisions are due July 28-29, September 15-16, October 27-28, and December 8-9.

• Mortgage rates: industry expectations of a return to the 5% range have faded; 6-7% is now the consensus norm.
• Crypto markets: how crypto traders reset their rate-cut bets after the Warsh nomination shows the most direct cross-asset exposure to the Fed’s language.
• Forward calendar: the remaining 2026 FOMC meetings sit on July 28-29, September 15-16, October 27-28, and December 8-9.

Frequently Asked Questions

When is the next FOMC meeting and what is on the agenda?

The Federal Reserve’s next FOMC meeting runs June 16-17, 2026, the first chaired by Kevin Warsh. The committee will publish its policy statement, an updated quarterly Summary of Economic Projections, and a new dot plot, with a press conference at 2:30 p.m. ET on Wednesday.

The dot plot is the most-watched release alongside the rate decision. It shows where each of the 19 FOMC members expects rates to land by year-end. Markets will also parse the statement for any removal of the easing bias.

What is the current federal funds rate?

The Federal Reserve has held its target range for the federal funds rate at 3.50% to 3.75% since December 2025. The June 16-17 decision is widely expected to leave that range unchanged, marking the fifth consecutive FOMC meeting with no move.

The current range is the highest since the Fed began cutting in late 2024. It reflects a deliberate pause as the central bank watches inflation prints and labor-market data. Any change would be a quarter-point move in either direction.

Will the Fed cut rates in 2026?

Seventy-two of 102 economists polled by Reuters expect the Fed to hold rates steady for the rest of 2026. Rate futures are pricing in at least one possible hike by end-2026, a shift that has happened quickly.

The next move, when it comes, is now more likely to be a hike than a cut, according to a slim majority of forecasters. The Fed has not signaled a near-term hike, but the easing bias in the policy statement is widely expected to be removed on Wednesday. Most forecasters have pushed their cut expectations into 2027 or dropped them altogether.

How will Kevin Warsh change the Fed?

Warsh has promised “regime change” at the central bank, and Wednesday is his first chance to say what that means in practice. At his confirmation hearing, Warsh said he would change how the Fed measures inflation and committed to reducing the size of the balance sheet.

His three stated priorities are a strict 2% inflation target, the end of forward guidance, and a sharper focus on the core mandate of price stability and employment. He has also said he plans to pare back the frequency of post-meeting press conferences. Wednesday’s dot plot and statement will be the first tests of those commitments.

What does a Fed pause mean for mortgage rates?

A Fed pause keeps the policy rate steady, but mortgage rates also reflect Treasury yields and term premiums. With the Fed on hold, the 30-year fixed mortgage rate is likely to stay elevated rather than drift back toward 6%.

Industry commentators say rates in the 6-7% range will be the norm for the rest of 2026. A hike in the policy rate would push mortgages higher; a surprise cut would push them lower. The Fed’s own forecast updates on Wednesday will move Treasury yields before they move the housing market.

Disclaimer

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or policy advice. Rate expectations, inflation figures, and policy projections can change quickly. Readers should consult a qualified financial professional for decisions tied to borrowing, saving, or investing. Figures are accurate as of publication on June 15, 2026.