Financial News: Fed Leaves Interest Rates Unchanged, Officials See Possibl

Fed Leaves Interest Rates Unchanged, Officials See Possible Rate Hike This Year

06/17/2026 - 14:27:00 (RTTNews)

(RTTNews) - Following Kevin Warsh's first monetary policy meeting as Federal Reserve chairman, the central bank on Wednesday announced its widely expected decision to leave interest rates unchanged.

The Fed said it decided to maintain the target range for the federal funds rate at 3.50 to 3.75 percent, citing its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

In a significantly pared down statement, the Fed said economic activity is expanding at a solid pace despite elevated uncertainty due in part to the conflict in the Middle East.

The statement also noted inflation remains elevated relative to the Fed's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.

Along with the announcement, Fed officials also provided their latest economic projections, which suggested interest rates could be higher by end of the year.

The median projection suggests officials expect interest rates at 3.8 percent by the end of 2026, hinting at a possible rate hike compared to the rate cut forecast in March.

Officials also raised their forecast for core consumer price inflation at the end of the year to 3.3 percent from 2.7 percent in March.

However, a note attached to the projection materials indicated that only eighteen of the nineteen meeting participants provided their rate and economic projections.

Fed watchers had suspected prior to the meeting that Warsh would not submit his projections considering his past criticism of forward guidance limiting the Fed's decision-making capabilities.

The Fed's next monetary policy meeting is scheduled to July 28-29, with CME Group's FedWatch Tool currently indicating an 81.3 percent chance rates will be left unchanged for the fifth straight meeting.

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