Fed rate decision highlights: Dot plot divergence and policy statement adjustment

Below are the key points from the Fed's Wednesday rate decision:

The FOMC voted unanimously to hold the benchmark rate at the target range of 3.5%-3.75%.

The dot plot reflecting rate forecasts shows division among officials on whether to hike before end-2026, with 9 of 18 officials expecting hikes, lifting the median rate forecast to 3.75% from 3.4% in March; the median also shows rates falling to 3.6% in 2027.

One Fed official did not submit any rate forecast; another did not provide a 2028 rate forecast.

The median core inflation forecast by Fed officials is 3.3% by end-2026, up from 2.7% in March; GDP growth is projected at 2.2%, down from the previous 2.4%.

The Fed streamlined the policy statement, removing language about possible further rate adjustments, and stated that "the Committee will achieve price stability."

The Fed said, "Despite high uncertainty from factors such as the Middle East conflict, economic activity continues to expand at a solid pace," and "productivity growth and capital investment remain strong."

The Fed added that job growth "has kept pace with labor force growth and the unemployment rate has changed little"; inflation remains elevated, "partly reflecting supply shocks that have driven up prices in energy and other sectors."