The Federal Reserve held its benchmark interest rate steady at 3.50%–3.75% at the June 17 FOMC meeting. What changed was everything around that decision.
Nine of 19 Federal Reserve officials now project at least one rate hike before the end of 2026. Six of them anticipate multiple increases. Three months earlier, exactly zero officials held that view.
The numbers telling the story
The CME FedWatch tool shows traders pricing in 66% to 77% odds of a quarter-point hike before December. Those probabilities climbed above 70% after the latest inflation data landed.
Inflation hit 4.2% in May 2026, a three-year peak. The updated Summary of Economic Projections pegs median real GDP growth at 2.2% for 2026, with PCE inflation running at 3.6%.
