Fed predicts rate hike in 2026: Warsh abstains, drawing attention
Special: Fed holds rates steady, streamlines statement to remove easing bias
Fed Chair Kevin Warsh arrives at a press conference in Washington, D.C. on June 17, 2026.
The Fed's latest economic projections show one rate hike in 2026, but the outlook is complicated by Fed Chair Kevin Warsh's absence from the forecasts.
Among the 18 officials, 9 project the federal funds rate will be above the current 3.5% to 3.75% range by end-2026. However, data from one participant appears missing, and Warsh confirmed at the press conference that he indeed did not submit any personal forecast.
The median rate projection shows the federal funds rate reaching 3.8% by end-2026. This figure is higher than the 3.4% given in the Fed's March Summary of Economic Projections (SEP) and 0.25 percentage points above the current target range.
Warsh, who recently took over as Fed chair, has signaled a desire to overhaul the central bank's communication strategy. He believes officials may have provided too much forward guidance and devoted excessive attention to mapping out future monetary policy paths.
Meanwhile, the Fed's policy statement underwent more substantial revisions than usual. In recent years, changes were typically limited to a few words or sentences, but Wednesday's statement was significantly shortened.
