The Federal Open Market Committee (FOMC), the policymaking arm of the Federal Reserve now led not by Jerome Powell but by the dovish Kevin Warsh — the choice of US President Donald Trump — wrapped up its meeting as expected: rates were once again left unchanged in the 3.5% to 3.75% range.

But something did change, as emerged from the statement and as the new Chair Warsh himself went on to say. Warsh stated that «we recognize that inflation continues to run well above 2%».

Watch the reaction of Wall Street, of Treasuries, and of the euro-dollar exchange rate.

Ahead of the announcement, the three main US stock indices had been edging slightly higher, with the Dow Jones hitting a fresh record for the third consecutive session. After the rate announcement, the Dow Jones, the Nasdaq, and the S&P 500 wobbled, quickly turning negative.

Strong buying on the dollar followed, with the EUR/USD pair sliding more than half a percentage point to $1.1546. Yields on 10-year Treasuries pushed immediately higher, settling at 4.463%.

Two-year Treasury yields jumped the most: a rise of 9 basis points, to 4.14%.

The market is now pricing in cumulative rate increases of +34 basis points, compared with the +21 basis points priced in before the statement was released.

The FOMC (Fed) statement on the US rate decision

Here is the statement in which the FOMC, the Federal Reserve’s policymaking arm, announced it had left rates unchanged in the 3.5% to 3.75% range:

«The Federal Open Market Committee (FOMC) approved the following statement by a vote of 12 to 0. The Committee decided to maintain the target range for the federal funds rate at 3.5% to 3.75%, in support of the Federal Reserve’s dual mandate. The Committee also reaffirmed its policy of maintaining ample reserves in the banking system. Economic activity continues to expand at a solid pace despite elevated uncertainty, due in part to the conflict in the Middle East. Productivity growth and capital investment remain robust. Job creation has continued to keep pace with the expansion of the labor force, and the unemployment rate has remained broadly unchanged. Inflation remains elevated relative to the Committee’s 2% objective, reflecting in part a supply-side shock that has driven price increases in some sectors, including energy. The Committee is committed to ensuring price stability.»

More than one detail of the statement just released by Warsh’s new Fed stands out: first of all its length, which is markedly shorter than the statements issued under Jerome Powell’s Fed.

Warsh’s new Fed leaves rates unchanged — and markets are watching

The status quo had already been factored in by the markets. The big new development is Kevin Warsh’s debut, with markets calling on him to clarify his view of the US economy and therefore the direction that he, together with the other FOMC members, intends to give US monetary policy.

Warsh was due to speak at 8:30 p.m. Italian time (2:30 p.m. ET) in the press conference that follows the US rate announcement, responding to journalists for the first time in his role as the Federal Reserve’s top official.

Any comment from him on inflation and on US GDP growth risks rattling the nerves of a Wall Street that, ever since the banker was officially nominated by Trump to replace Jerome Powell, has been asking not only what will happen to US rates, but also what will become of the dot plot — the chart the Fed publishes every quarter within its updated economic projections document (the Summary of Economic Projections, or SEP).

Kevin Warsh has made no secret of his opposition to any forward-guidance tool that might signal the direction of rates.

And the dot plot does exactly that, laying out in a diagram the rate estimates of each of the 19 FOMC members.

In a Senate hearing in April, before taking the central bank’s top seat upon the expiry of Jerome Powell’s mandate on May 15, Kevin Warsh put it this way, commenting on the dot plot and foreshadowing a coming shake-up inside the Fed:

«The Fed tells the whole world what its dot plots will be and what its forecasts will be. But the Fed is made up of human beings. And it also tends to hold on to those forecasts longer than it should.»

A mistake, in his view. Warsh had therefore spoken of the need to usher in «major changes» at the Fed.

Hawkish signals from today’s dot plot

While the dot-plot riddle awaits a resolution, the central bank did publish the dot chart today, as scheduled. And the diagram revealed decidedly more hawkish rate projections.

The dot plot indicates that, at the end of 2026, US rates will stand at 3.8%, compared with the 3.4% shown in the March dot plot; US rates are then seen at 3.6% and 3.4% at the end of 2027 and 2028 respectively — higher values than the previous estimates in the chart, which had pointed to US rates of 3.1% at the end of both years, and therefore lower than current levels.

The dot plot essentially confirms what the doves absolutely did not want to hear: namely, that Warsh is unlikely to be able to please Trump anytime soon. Trump chose him in the hope of seeing US fed funds rates start falling again — rates that today instead remained on hold, after the most recent cut, which now dates back to December 2025.

The oil shock triggered by the US-Iran war has, for its part, fueled US inflation, sending it soaring to a level more than double the 2% target the US central bank is aiming for.

The consumer price index in fact surged 4.2% year over year in May, accelerating significantly after rising 3.8% in April.

Core CPI inflation — stripped of the more volatile energy and food components — also climbed, jumping 2.9% after the +2.8% of the previous month.

Those figures, together with other macroeconomic indicators that confirmed the strength of the labor market, had already led several traders and economists to quickly shelve their forecasts of any interest-rate cuts.

Editor’s note

This article was originally published in Italian on money.it by Laura Naka Antonelli on June 17, 2026 as «La Fed conferma tassi USA al 3,5%-3,75%. Inizia l’era di Kevin Warsh, chiamato a sciogliere anche il nodo dot-plot». It has been translated and adapted for an international audience by the Money.it International desk.