Fed forecasts one rate hike in 2026 as Warsh abstains, drawing attention

Special topic: The Fed keeps rates unchanged and trims statement to remove a dovish tilt

Fed Chair Kevin Warsh arrived in Washington, D.C., on June 17, 2026, to attend a press conference.

The Fed's latest economic projections show one rate hike in 2026, but the outlook is complicated by the fact that Fed Chair Kevin Warsh did not submit a personal forecast.

Among the 18 officials, 9 forecast that the federal funds rate will be above the current 3.5% to 3.75% range by the end of 2026. However, one participant's data appears to be missing from the forecast set, and Warsh confirmed at the press conference that he did not provide any personal forecast.

The median rate forecast now shows the federal funds rate reaching 3.8% by the end of 2026. That is higher than the 3.4% in the Fed's March Summary of Economic Projections (SEP), and 0.25 percentage points above the current target range.

Warsh, who has just taken over as Fed chair, has signaled that he wants to overhaul the central bank's communication strategy. He believes officials may have provided too much forward guidance and devoted too much effort to mapping the future path of monetary policy.

Meanwhile, the Fed's policy statement was also rewritten more extensively than usual. In recent years, changes to the statement were usually limited to a few words or sentences, but Wednesday's version was heavily shortened.