US Fed Meeting 2026 LIVE: Warsh begins Fed tenure by keeping rates unchanged, policymakers signal a hike ahead
The Federal Reserve, under new Chair Kevin Warsh, held interest rates steady at 3.5%-3.75% during its June 16-17 meeting while signaling that nearly half of policymakers could support a rate hike later this year. Warsh emphasized the Fed’s commitment to 2% inflation and discussed AI’s impact on productivity, though he declined to provide rate projections or assign forecasts for future policy directions.
The Federal Reserve, led by newly appointed Chair Kevin Warsh, kept interest rates unchanged at 3.5%-3.75% during its two-day meeting ending June 17, marking Warsh’s first policy decision. The decision aligns with expectations but reflects cautious optimism, as nearly half of the Fed’s policymakers signaled potential support for a rate hike later in 2026, a shift that surprised President Donald Trump and markets. Warsh’s tenure began with a shorter policy statement compared to his predecessor, Jerome Powell, and he confirmed he would not submit personal rate forecasts. He reiterated the Fed’s unwavering commitment to achieving 2% inflation, calling it a "choice" and emphasizing the committee’s unanimous stance. The Fed also appointed a task force to examine productivity, inflation frameworks, communications, balance sheets, and data use, with details to follow in the coming days. The Fed’s decision comes amid a resilient labor market, uncertain inflation trends, and elevated oil prices due to ongoing geopolitical tensions involving Iran. Stocks dipped following the announcement, with the S&P 500 and Nasdaq each falling 0.5% and the Dow Jones Industrial Average dropping 71 points as investors reacted to the hawkish signals. The Fed had previously cut rates in three consecutive meetings before pausing in January. Warsh addressed AI’s economic impact during his press conference, noting its dual role as both an opportunity and a risk. He acknowledged AI-driven demand—such as data center growth—was already influencing GDP but expressed uncertainty about the timing and extent of supply-side growth. His remarks underscored the Fed’s evolving focus on technological and economic dynamics as it navigates future policy adjustments.
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