Fed Decision June 2026

The Fed kept interest rates steady at 3.50-3.75% while new Chair Kevin Warsh pivoted toward a more hawkish tone and structural reforms. SEB maintains its forecast for two rate cuts in 2027 despite the Committee's current hawkish projections.

Key Takeaways

• 1.The Fed maintained policy rates at 3.50-3.75% and removed forward guidance in a statement rewrite.
• 2.New Fed Chair Kevin Warsh initiated significant organizational changes via task forces targeting communication, balance sheet, and data methodologies.
• 3.Median Fed projections signal potential rate hikes in 2026, though analysts consider these potentially outdated due to recent geopolitical and oil price developments.

Table of Contents

• Warsh came across as hawkish with Committee seeing scope for hikes
• Key points
• Warsh promises large reforms and starts with dropping guidance
• Hawkish but also likely outdated rate projections
• Warsh avoids revealing his own policy views
• Warsh ideas for changes will be handled by task forces
• Hawkish market reactions
• We stick with our forecast for further cuts for now

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