The Federal Reserve is almost certainly going to do nothing at its June 16-17 meeting. Markets are pricing in a 96% probability that the Fed holds its benchmark federal funds rate at 3.50%-3.75%, according to the CME FedWatch tool. That would mark yet another meeting without a move, as the central bank has kept rates unchanged since December 2025.
A new chair, same old dilemma
Here’s what makes this particular hold interesting: it’s Kevin Warsh’s first FOMC meeting as chair. Sworn in on May 22, 2026, just three weeks before this decision, Warsh is stepping into the big chair at a moment when the Fed’s options are genuinely constrained.
Inflation remains above the 2% target and has been hovering near three-year highs. At the same time, May payrolls came in at 172,000 new jobs, and the unemployment rate sits at 4.3%. The economy is running warm enough that cutting rates would look reckless, but not so hot that hiking them is obviously necessary.
The FOMC appears to be shifting from its previous easing bias toward something more neutral, possibly even hawkish. Several officials have hinted that rate hikes remain on the table if inflation doesn’t cooperate.
