The Federal Reserve held its benchmark interest rate steady at 3.5–3.75% on June 17, voting 12-0 to leave policy unchanged at Kevin Warsh’s first meeting as Fed chair.

The decision itself was widely expected. What wasn’t was the scale of the shift in the projections that accompanied it.

The updated dot plot showed nine of 18 FOMC members now expect at least one rate hike before the end of 2026, with six projecting two. The median 2026 year-end rate forecast moved to 3.8%, up from 3.4% in March. The Fed also raised its PCE inflation forecast sharply – to 3.6% from 2.7% – citing supply shocks including elevated energy prices connected to the conflict in the Middle East. Language indicating a bias toward future cuts was removed…