Fed holds rates at 3.5%-3.75%, drops 2026 cut outlook
What's new: Officials now pencil in a 3.8% year-end rate and split 9-8 over whether the next move is a hike or no change.
The Federal Reserve left its benchmark rate unchanged at 3.5% to 3.75% on Wednesday, but its new projections pointed in a more hawkish direction. The Federal Open Market Committee unanimously kept rates steady, while the median estimate for the federal funds rate at the end of 2026 rose to 3.8% from 3.4% in March, signaling at least one hike this year.
The post-meeting statement was also sharply shortened and dropped language that had suggested a bias toward future cuts. In his first meeting as Fed chair, Kevin Warsh did not submit a personal rate projection to the central bank's closely watched dot plot and said he plans a broader review of Fed communications.