Fed holds rates steady, pares down statement to remove cutting bias

WASHINGTON – Kevin Warsh 's first meeting as Federal Reserve chairman concluded Wednesday with no change in interest rates and a nod to possible hikes ahead. The meeting also saw the removal of key language indicating a bias toward future cuts within a dramatically shorter policy statement.

The Federal Open Market Committee voted unanimously to keep its benchmark overnight borrowing rate anchored in a range of 3.5%-3.75%. The federal funds rate has held there since the central bank lowered rates by three-quarters of a percentage point in the latter part of 2025.

With a bevy of intrigue over Warsh taking the central bank helm, the meeting followed the same pattern as the others this year regarding rates but differed otherwise.

Fed officials, through their closely watched "dot plot" grid, removed their prior outlook for a rate cut this year and indicated that a hike is possible. However, the Summary of Economic Projections missed the participation of one member: Warsh.

Warsh has been a critic of the forecasting tool as well as other forward guidance out of the committee including projections on unemployment, inflation and gross domestic product in the SEP.

Heading into the meeting, Fed watchers had suspected Warsh wouldn't submit his outlook , and some anticipated he might look to end the feature altogether. He confirmed at a news conference following the decision that he had declined to share a forecast and is forming task forces to overhaul major Fed operations.

"I did not submit a dot for me," Warsh said. "It's not helpful in the conduct of policy. I suspect by year-end, as I mentioned in my opening statements, there'll be a review about communication broadly, press conferences, dots, meetings, and the like, transcripts, minutes. This will be part of that. I don't want to prejudge the outcomes there, but I'm pretty open-minded about what they could be."

Based on the 18 of 19 possible responses, the median estimate for the fed funds rate at the end 2026 is now 3.8%, up from 3.4% in the prior projections from March and signaling the committee sees at least one rate hike as necessary this year. Meeting participants were split on the path for rates this year, with eight expecting no change, one seeing a cut and nine anticipating at least one hike.