Key Takeaways
- Kevin Warsh's 1st FOMC Address Re-Sets Expectations
- Forward Outlooks Will Now Defer to Assigned Task Forces
- Market Activity Dropped Initially but Held Steady During Warsh's Address
Wednesday, June 17th, 2026
The first Federal Open Market Committee (FOMC) meeting with new Fed Chair Kevin Warsh has recently concluded, with the first unanimous 12-0 decision on Fed policy in the past year. The FOMC will keep interest rates steady at their current +3.50-3.75% level. It’s the first time Fed Governor Stephen Miran did not advocate a rate cut in his tenure so far of seven FOMC meetings.
In an official statement shorter than 150 words, the Fed eschewed forward guidance and “dot-plots” from the Fed Chair, with these considered “not well-suited to current policy conjuncture,” as Warsh was quoted in his opening statement of today’s press conference. That said, nine members — half of the FOMC — expect at least one +25 basis-point (bps) hike in interest rates by the end of the year, before trimming back down to current levels in 2027.
To the extent there did exist any projections forward, Real GDP is expected to expand to +2.2% by the end of this year, but only to +2.3% by the end of next. Total Personal Consumption Expenditures (PCE) are expected to dwindle slightly to +3.6% as of the end of 2026, and slide -130 bps to +2.3% by the end of next year. The Unemployment Rate is seen as remaining steady at +4.3%.
In his initial Q&A session with the financial press, Warsh was fairly buoyant and generous with his time, especially compared with the somewhat chalky final addresses with former Chair Jerome Powell, who had spent months under fire from the White House by then. Warsh tended toward depicting conflicts at the FOMC meeting as “family fights,” reverting to “first principles” and deferring to his new system of task force objectives instead of making forward projections of his own. “We don’t want to pre-judge the outcome,” was one way he phrased this.
More than any other expression from the FOMC statement and Warsh’s presser afterward was that the Fed “will deliver price stability.” The emphasis here was to the very omission of discussing the full-employment mandate of the FOMC. Jobs gains have “kept pace” of late; the concerns from the Fed earlier this year of a slipping labor market did not show up in today’s statement or address.
In terms of the task forces newly announced, formed outside the Federal Reserve unit, they will address: 1) Fed Communications (including whatever forward guidance they choose to offer), 2) Balance Sheet issues, 3) Use & Reliance on Existing Data Sources, 4) Productivity & Jobs, and 5) Inflation Frameworks. He both advocated “honoring” the +2.0% inflation target, without formally committing to achieving this as the end-goal (Warsh said he focused on the “left-side of the decimal point,” meaning the “2” and not necessarily the “.0” — his first opening toward a higher optimal inflation rate). Again, we assume this is depending on what the task forces bring forth.
Market activity fell off somewhat from highs or near-highs across the board upon the statement’s release. It buoyed somewhat as Warsh outlined his new approach to the Chair — we’d seen a consistent methodology over the previous three Fed Chairs: Ben Bernanke (2006-2014), Janet Yellen (2014-2018) and Powell (2018-2026) — but dropped off again a half-hour before the close. This is typical; Warsh didn’t fumble anything, but it takes some time for a comfort level to set in.
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New Era for the Fed: Kevin Warsh at the FOMC
Key Takeaways
Wednesday, June 17th, 2026
The first Federal Open Market Committee (FOMC) meeting with new Fed Chair Kevin Warsh has recently concluded, with the first unanimous 12-0 decision on Fed policy in the past year. The FOMC will keep interest rates steady at their current +3.50-3.75% level. It’s the first time Fed Governor Stephen Miran did not advocate a rate cut in his tenure so far of seven FOMC meetings.
In an official statement shorter than 150 words, the Fed eschewed forward guidance and “dot-plots” from the Fed Chair, with these considered “not well-suited to current policy conjuncture,” as Warsh was quoted in his opening statement of today’s press conference. That said, nine members — half of the FOMC — expect at least one +25 basis-point (bps) hike in interest rates by the end of the year, before trimming back down to current levels in 2027.
To the extent there did exist any projections forward, Real GDP is expected to expand to +2.2% by the end of this year, but only to +2.3% by the end of next. Total Personal Consumption Expenditures (PCE) are expected to dwindle slightly to +3.6% as of the end of 2026, and slide -130 bps to +2.3% by the end of next year. The Unemployment Rate is seen as remaining steady at +4.3%.
In his initial Q&A session with the financial press, Warsh was fairly buoyant and generous with his time, especially compared with the somewhat chalky final addresses with former Chair Jerome Powell, who had spent months under fire from the White House by then. Warsh tended toward depicting conflicts at the FOMC meeting as “family fights,” reverting to “first principles” and deferring to his new system of task force objectives instead of making forward projections of his own. “We don’t want to pre-judge the outcome,” was one way he phrased this.
More than any other expression from the FOMC statement and Warsh’s presser afterward was that the Fed “will deliver price stability.” The emphasis here was to the very omission of discussing the full-employment mandate of the FOMC. Jobs gains have “kept pace” of late; the concerns from the Fed earlier this year of a slipping labor market did not show up in today’s statement or address.
In terms of the task forces newly announced, formed outside the Federal Reserve unit, they will address: 1) Fed Communications (including whatever forward guidance they choose to offer), 2) Balance Sheet issues, 3) Use & Reliance on Existing Data Sources, 4) Productivity & Jobs, and 5) Inflation Frameworks. He both advocated “honoring” the +2.0% inflation target, without formally committing to achieving this as the end-goal (Warsh said he focused on the “left-side of the decimal point,” meaning the “2” and not necessarily the “.0” — his first opening toward a higher optimal inflation rate). Again, we assume this is depending on what the task forces bring forth.
Market activity fell off somewhat from highs or near-highs across the board upon the statement’s release. It buoyed somewhat as Warsh outlined his new approach to the Chair — we’d seen a consistent methodology over the previous three Fed Chairs: Ben Bernanke (2006-2014), Janet Yellen (2014-2018) and Powell (2018-2026) — but dropped off again a half-hour before the close. This is typical; Warsh didn’t fumble anything, but it takes some time for a comfort level to set in.
Questions or comments about this article and/or author? Click here>>