June FOMC Reaction Hawkish Today Reforms Tomorrow

The June 2026 FOMC meeting signaled a hawkish shift under Chair Warsh, emphasizing inflation control and structural reforms. Morgan Stanley analysts remain optimistic on disinflation and maintain a forecast for the Fed to remain on hold this year.

Key Takeaways

• 1.The June FOMC meeting delivered a hawkish shift with a scaled-down statement that removed easing bias and focused on above-target inflation.
• 2.Fed Chair Warsh plans to reform Fed processes via five task forces covering communication, balance sheet policy, data, productivity, and inflation frameworks.
• 3.Morgan Stanley forecasts the Fed to remain on hold this year despite the hawkish rhetoric, as core inflation is expected to track below Fed projections.

Table of Contents

• June FOMC meeting: A hawkish shift, less communication, reformist
• The Press Conference: Hawkish and Inflation-Focused
• Awaiting the Task Forces
• FOMC Statement Changes: Scaled Down with Hawkish Tilt
• Global Macro Strategy
• Ready to do your own homework?
• US Agency MBS – Tactically Underweight
• Munis: Lower ratios and a steeper ratio curve
• Valuation Methodology & Risks

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