A More Hawkish Fed Under Warsh
In Kevin Warsh's first meeting as Chair, the Fed held rates at 3.50% to 3.75% for a fourth straight meeting, on a unanimous 12-0 vote. The surprise was in the projections: nine of eighteen officials now see at least one rate increase in 2026, with six penciling in two, a clear shift from prior forecasts that had pointed to cuts. The Committee also raised its 2026 inflation outlook and trimmed its growth estimate. Warsh emphasized price stability, cut the statement to roughly 130 words, dropped forward guidance, and declined to submit his own rate projection. Stocks dipped on the hawkish tone midweek before recovering into the close.