The Fed report

highlights from The FOMC Policy Update
JUNE 18, 2026

Yesterday, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its June meeting.

FOMC Policy Updates: Key Highlights

  • Fed Leadership Change: This meeting marked Kevin Warsh’s first as the new Fed Chairman following his confirmation and subsequent assumption of office in May. He succeeds Jerome Powell, who, as previously announced, will remain on the Board of Governors for a period of time “to be determined.” Stephen Miran’s resignation from the Board of Governors became effective with Warsh’s swearing in to the Board. Chairman Warsh previously served on the Board of Governors from 2006 to 2011.
  • Target Range Maintained: As generally expected, the FOMC maintained the target range for the federal funds rate at 3.50-3.75% for the fourth consecutive meeting. The statement was noticeably shorter than recent statements and clearly indicated that the key risk to the Fed’s dual mandate continues to be elevated inflation, “in part reflecting supply shocks that have driven price increases in certain sectors, including energy.” The brief statement concluded with a commitment that Chairman Warsh reiterated throughout the press conference: “The Committee will deliver price stability.”
  • Economic Projections Update: The updated Summary of Economic Projections (SEP) highlighted a hawkish shift and division among participants regarding the rate paths for the remainder of the year:
    – six officials see two or more rate hikes,
    – three officials see one rate hike,
    – eight officials see no change, and
    – one official sees one rate cut.

    Chairman Warsh abstained from providing a forecast. This represents a noticeable shift from the March SEP, when all 19 officials saw either no change or one or more rate cuts in 2026. Additionally, the median 2026 core PCE projection also increased to 3.3% from 2.7% in March.

notable commentary & MARKET REACTION

  • Task Force Announcements: During his prepared remarks, Chairman Warsh announced the creation of five new task forces in “areas that are central to the broad conduct of monetary policy:”
    1. Fed communications,
    2. The Fed’s balance sheet policy,
    3. The Fed’s use of and reliance on existing data sources,
    4. Productivity and jobs in an era of transformation, and
    5. The Fed’s inflation frameworks.

    Chairman Warsh characterized these five areas as being “worthy of a fresh look” and indicated that the task forces will be a priority over the near-to-intermediate term. Each independent task force will examine current Fed practices and propose alternatives for consideration while sharing the common objective of promoting “a Federal Reserve that is clear-eyed about its mission, fit for purpose, and focused on the future.”
  • Immediate Changes to Fed Communications: In addition to creating a task force focused on Fed communications, Chairman Warsh acknowledged some shifts that are already underway in this area.
    • Shorter Fed Statements. He characterized the new policy statement as “a bit shorter, a bit simpler” that “dispenses with some older language” and “just gives you the facts, as best [the Fed] can judge it.”
    • Elimination of Forward Guidance. The statement officially removed forward guidance, which the FOMC “agreed was not well-suited to the current policy conjuncture.” While it appeared that this view was shared among FOMC participants at this specific meeting due to the highly uncertain macroeconomic backdrop, this action is consistent with Chairman Warsh’s perspective that providing forward guidance is not a useful monetary policy tool, as he believes it clouds efficient market pricing.
    • Press Conference Cadence. When asked whether he will continue to hold a press conference following each regularly scheduled FOMC meeting, Chairman Warsh provided a somewhat vague response indicating that there could be a shift in the cadence of future press conferences, characterizing them as “useful, but when you have one, you want to make sure you have something important to say.”
  • Commitment to Price Stability and Rejection of the Dual Mandate Tradeoff: Not surprisingly, a significant portion of the press conference revolved around elevated prices and the Fed’s focus on taming inflation to levels closer to its 2% long-term objective. Chairman Warsh acknowledged that persistent inflation has been a burden to the American people. Notably, he also indicated that balancing the dual mandate goals of maximum employment and price stability may not require tradeoffs that prioritize one goal over the other: “What I believe is if we do our job, we can make strong growth, low prices, and strong employment mutually compatible. So, what you heard from the Committee today is we’ve got some work to do on the price stability front.”
  • New Chapter for the Central Bank: In his first press conference, Chairman Warsh clearly indicated that he intends to examine current Fed practices and refresh those where he sees room for improvement. As he stated, “at any institution, a change in leadership is a natural and timely opportunity to reaffirm its mission, to review current practices, and to consider whether those practices best meet our objectives.” While the Fed’s legislative remit has not changed, the market will be closely monitoring any changes in its approach to implementing monetary policy. As the Fed enters a new chapter under his leadership, Chairman Warsh emphasized that his efforts will revolve around one central goal: “getting monetary policy right – or as near to it as [the Fed] can do. That is [the Fed’s] north star.”
  • A Hawkish Wake-Up Call: Financial markets reacted adversely as investors digested the combination of a hawkish dot plot and the elimination of forward guidance. Equity markets quickly reversed morning gains, with the S&P 500 slumping 1.3% and the Nasdaq composite sinking 1.5% upon the release. In the fixed income market, Treasury yields surged as traders began pricing in a higher-for-longer rate environment. The 2-year Treasury yield jumped 13 basis points on the day to 4.19%, while the 10-year Treasury increased a more modest 5 basis points to 4.49%.
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