SNAPSHOT: Equities down, Treasuries down, Crude up, Dollar up, Gold downREAR VIEW: Fed holds rates as expected; FOMC statement, SEP's, and Chair Warsh come in hawkish; US Retail Sales beat; Pending Home Sales rise in May; EIA crude stocks draw more than expected; Softer-than-expected UK CPI; Riksbank holds ratesCOMING UP: Data: UK Employment Report (Apr), Average Earnings (May), Canadian PPI (May), US Initial Jobless Claims (Jun/13), New Zealand Trade Balance (May). Events: SNB Policy Announcement, Norges Bank Policy Announcement, BoE Policy Announcement, CNB Policy Announcement, UK Makerfield by-election. Speakers: Norges Bank's Bache; SNB's Schlegel; ECB's Elderson, Cipollone, Lane. Supply: Spain, France, US.More Newsquawk in 2 steps:1. Subscribe to the free premarket movers reports2. Trial Newsquawk’s premium real-time audio news squawk box for 7 daysMARKET WRAPA broad-based hawkish reaction was seen across markets, given a much more hawkish than anticipated Federal Reserve decision (reviews below). Given this, US indices saw losses with all sectors in the red, with Treasuries sold and precious metals noticing extensive losses, with spot silver underperforming its counterpart. The Dollar saw significant strength post-Fed, to the detriment of G10 FX peers, with high-beta FX lagging ahead of a few central bank decisions on Thursday, namely SNB, BoE, and Norges. WTI and Brent were very choppy on Wednesday and settled with slight gains, as geopolitics took a back seat, for the first time in a while, as attention focuses on the official signing of the US/Iran MoU, with some suggesting it may even come before Friday. On the data footing, US retail sales surpassed Wall St. consensus, but garnered little market reaction, given all focus was on the FOMC later in the session.FEDOverall, the statement and dot plots were more hawkish than expected. The Fed kept rates on hold as widely expected but completely changed the FOMC statement, in a unanimous decision. The committee agreed to remove forward guidance completely, while it also updated its descriptions of the economy, adding more factors to the statement:InflationThe Committee reiterated that inflation remains elevated, but updated its language to note that inflation is running above its 2% goal "in part reflecting supply shocks that have driven price increases in certain sectors, including energy" (prev. "in part reflecting the recent increase in global energy prices"). The statement also explicitly reaffirmed the Committee's commitment to achieving price stability.EmploymentThe labour market assessment was upgraded. The Fed now states that "job gains have kept pace with the workforce, and the unemployment rate has changed little" (prev. "job gains have remained low, on average, and the unemployment rate has been little changed in recent months"), reflecting the recent run of stronger payroll reports.Economic ActivityThe Committee noted that economic activity is "expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East" (prev. "economic activity has been expanding at a solid pace"). It also added a new line stating that "productivity growth and capital investment are strong."ReservesThe statement also explicitly reaffirmed the Committee's policy of maintaining ample reserves in the banking system.Dot PlotsThe updated Summary of Economic Projections was notably hawkish. One participant did not submit forecasts, widely believed to be Chair Warsh, given his recent arrival at the Fed and his well-known scepticism towards forward guidance.The median federal funds rate projection for 2026 rose to 3.8% from 3.4%, implying one 25bp rate hike versus one 25bp rate cut in the March projections. The 2027 median rose to 3.6% from 3.1%, implying rates are expected to remain on hold through the end of 2027. The 2028 median increased to 3.4% from 3.1%, while the longer-run rate remained unchanged at 3.1%.The economic projections also reflected a more stagflationary outlook. Inflation forecasts were revised higher, unemployment projections were revised slightly lower in 2026, and real GDP growth forecasts were downgraded.The distribution of dots was equally notable. While the median projects one hike in 2026, one participant forecasts three hikes, five project two hikes, and three project one hike. In March, no participants projected rate hikes. Meanwhile, eight participants expect rates to remain unchanged through 2026 (prev. seven), while only one projects a rate cut (prev. seven). The shift in the distribution highlights a significant hawkish turn within the Committee and suggests policymakers are increasingly focused on inflation risks rather than labour market concerns.FED CHAIR WARSH:Warsh's first press conference largely echoed the hawkish statement given his strong emphasis on returning inflation to the target. When asked about employment, he said the committee thought the labour market was stable, but some thought it was trending better than that, adding that trends matter more than data points. He was also asked about how restrictive he views policy, in which he gave a hawkish response; he said it is "uneven", noting the only place you could see it as restrictive is in the housing market. Warsh also confirmed it was him who did not submit a dot plot forecast, as he does not see it helpful on how to conduct policy - this could imply he may not submit dots again in two meetings' time. Regarding the hawkish shift in his colleagues' dot plots, he said they did not feel bound by their dots, and he did not hear a lot of conviction about them. On SEPs, Warsh added that the FOMC made a commitment to deliver projections and expects them to live up to that, but by the end of the year, would not be surprised if there is a new communications framework and changes to SEPs. When asked about whether a rate cut was discussed, Warsh said there was one proposal on the table, very little discussion on it, no discussion on any other proposals - he didn't specify the direction of the proposal.The new Fed Chair also announced he will put five task forces together to review certain topics: 1) Communication: Expects to propose changes, including to SEPs. 2) Balance sheet: Review the benefits and risks of an ample reserve regime, and the composition of the balance sheet.