The Federal Reserve kept its powder dry on June 17, voting unanimously to hold the federal funds rate at 3.50%-3.75%. The real story, though, was buried in the dot plot, where a clear majority of officials signaled they expect rates to go up, not down, before the year is over.
The median projection for the federal funds rate at year-end 2026 jumped to 3.8%, up from 3.4% in the March Summary of Economic Projections. Nine of 18 FOMC members now see rates climbing higher by December, a sharp reversal from the easing bias that dominated much of 2025.
The dot plot debate and Warsh’s silent protest
The 12-0 vote to hold rates steady was the easy part. The scatter of individual projections showed officials pulling in different directions, with some still clinging to the possibility of cuts while the majority leaned toward at least one more hike.
And then there’s Kevin Warsh, chairing his first FOMC meeting. Warsh has been a vocal skeptic of forward guidance for years, arguing that telegraphing rate moves too far in advance boxes the Fed into corners it doesn’t need to be in. He put that philosophy into practice by declining to submit his own dot projection.
