Federal Reserve holds rates steady at Kevin Warsh’s first meeting as chair
Nine of 18 policymakers projected at least one rate increase this year as the Fed dropped its usual guidance on future cuts.
- Federal Reserve Chairman Kevin Warsh led his first policy meeting on Wednesday, voting unanimously to maintain the federal funds rate in the 3.5%–3.75% range while eliminating language indicating future rate cuts.
- President Donald Trump appointed Warsh earlier this year expecting rate cuts, yet the new chair has previously criticized the Fed's practice of issuing forward guidance and quarterly economic projections.
- With inflation at 4.2% in May, nine of 18 policymakers now project at least one rate hike this year, while Warsh appears to have withheld his own rate forecast.
- The Nasdaq composite slipped 0.6% and Treasury yields rose following the announcement, as analysts warned that the Fed's pivot reflects heightened concerns about inflation remaining above the 2% target.
- Warsh announced the creation of task forces to review Fed communications and data streams, seeking to reduce the institution's public profile while addressing economic pressures linked to the Iran conflict.
128 Articles
128 Articles
US Fed begins Warsh era with hold on interest rates, may hike later this year
The US Federal Reserve held interest rates steady on Wednesday, but policymakers expect a hike in borrowing costs later this year amid growing concerns about inflation lodged above the US central bank’s 2 per cent target. New quarterly projections showed nine Fed officials now anticipate a hike in rates by the end of 2026, and an updated policy statement removed language that had been used to flag the likelihood of further reductions in borrowi…
The previous chairman, Jerome Powell, received strong criticism from President Trump for not lowering interest rates.
Fed begins Warsh era by keeping rates on hold, sees one hike later this year
The Federal Reserve held interest rates steady on Wednesday, but policymakers expect a hike in borrowing costs later this year amid growing concerns about inflation lodged above the U.S. central bank's 2% target.
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