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Another nine expected no move or a cutAuthor of the article:Last updated 2 hours ago You can save this article by registering for free here. Or sign-in if you have an account.U.S. Federal Reserve chair Kevin Warsh speaks to reporters during his first news conference since taking the helm at the central bank on June 17 in Washington, D.C. Photo by Chip Somodevilla/Getty ImagesUnited States Federal Reserve officials left interest rates unchanged and were split over whether they expect to raise rates this year.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorPolicymakers’ new projections indicated nine officials foresee at least one quarter-point hike this year, with six anticipating at least two. Another nine expected no move or a cut.Notably, only 18 officials out of 19 entered their projections for rates at the end of 2026. The absence of an entry suggests new chairman Kevin Warsh, who has been critical of so-called forward guidance, declined to submit a rate forecast.In its first gathering under Warsh’s leadership, the Federal Open Market Committee voted unanimously Wednesday to hold its benchmark federal funds rate in a range of 3.5 per cent to 3.75 per cent.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againTreasuries sold off, the dollar rallied and stocks fell after the decision was announced.The decision marked the fourth straight time officials held rates in place as they continue to shift their concerns from the labor market to inflation, driven in part by the impact of the Iran war on energy prices.In their post-meeting statement, officials said inflation remained elevated and vowed to deliver price stability.They continued to characterize growth as “solid.” Officials also described productivity growth and capital investment as strong. The statement was also shorter than recent post-meeting releases. Its brevity could be a sign of things to come under Warsh, who has promised to shake up the central bank’s communication strategy.Warsh arrived at the Fed last month promising “regime change.” In the opening remarks of his first press conference, he announced the creation of multiple task forces aimed at examining five areas with an eye toward proposing changes to the way the Fed operates.The task forces will address communications, the balance sheet, the Fed’s “use and reliance on existing data sources,” productivity and jobs and the central bank’s “inflation frameworks.”Responding to questions, Warsh ruled out re-examining the Fed’s two per cent inflation target.“I see no reason, until we have reestablished our commitment and ability to deliver on the two per cent inflation objective, to revisit that,” he said.Policymakers made several adjustments to the economic forecasts they issued in March, soon after the Middle East conflict began.Policymakers’ median forecast for inflation this year jumped to 3.6 per cent from 2.7 per cent. Their forecast for 2026 core inflation — which excludes volatile food and energy categories — increased, as well, to 3.3 per cent from 2.7 per cent.Officials lowered their median outlook for growth in 2026 to 2.2 per cent, from the 2.4 per cent they forecast in March. Their median unemployment forecast for the end of 2026 fell to 4.3 per cent from 4.4 per cent.The economic backdrop for policymakers has shifted dramatically from the beginning of the year when fragility in the labour market and a more benign outlook for inflation made additional rate cuts in 2026 plausible to many Fed officials.Since then, strong jobs data has suggested the labour market is pulling clear of a long period of weak hiring growth. Job creation topped all forecasts in May and the unemployment rate held steady at 4.3 per cent.At the same time, an April report on prices showed the Fed’s preferred measure of inflation hit 3.8 per cent from a year earlier, the largest increase since 2023. Separate measures of consumer and producer prices also rose in May at the fastest pace in more than three years.That’s driven not only by the Iran war but also by price pressures spilling over from the surge of investment by companies building out the infrastructure for artificial intelligence.Still, news of a preliminary peace deal between the U.S. and Iran has sent oil prices tumbling. If the agreement holds, that could take substantial pressure off of energy costs and inflation.At the start of the year investors had been betting on a resumption of Fed rate cuts this year. But heading into the June meeting, pricing in federal funds futures pointed to a quarter percentage point increase in rates by the end of 2026.—With assistance from Ye Xie. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.