There’s a new Federal Reserve Chair, but the result of the Fed’s latest meeting didn’t change.
The Fed board voted Wednesday to leave interest rates where they are.
In Kevin Warsh’s first meeting since replacing Jerome Powell, the Federal Open Market Committee voted unanimously to keep its benchmark overnight borrowing rate in a range of 3.5%-3.75%. That’s where it’s been since the Fed lowered rates by three-quarters of a percentage point late last year.
According to multiple media reports, the committee left the suggestion rate hikes could be coming. Warsh also took out language indicating a bias toward future cuts within a dramatically shorter policy statement, according to a report from CNBC.
With a bevy of intrigue over Warsh taking the central bank helm, the meeting followed the same pattern as the others this year regarding rates but differed otherwise.
A note attached to the projection materials indicated that 18 of the 19 meeting participants submitted rate and economic projections.
According to the CNBC report, the median estimate for the fed funds rate at the end 2026 is now 3.8%, up from 3.4% in the prior projections from March. That result would seem to indicate the committee sees at least one rate hike as necessary this year.
The board’s statement offered just a brief summary of economic conditions followed by a vow to control inflation.
“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong,” the statement read. “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”
“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability,” the committee added.
