Half the Federal Reserve’s policymakers now see interest rates going up, not down, before the year is out. That’s a problem for anyone betting on cheaper money.
The Fed’s June 17 meeting ended with a unanimous decision to hold the federal funds rate at 3.50%-3.75%, the fourth consecutive pause. But the real story wasn’t the hold. It was buried in the dot plot, the chart where each official anonymously marks where they think rates should be headed.
The dot plot tells a hawkish story
Nine out of 18 officials who submitted projections now anticipate at least one rate hike before December. Six of those nine expect two or more increases. For context, earlier projections had suggested potential rate cuts during 2026. The committee has effectively flipped its stance.
The math shows up clearly in the median projection. The expected federal funds rate at year-end climbed to 3.8%, up from 3.4% in the March Summary of Economic Projections. That 40-basis-point jump in a single quarter is not subtle.
