As widely expected, the FOMC decided to keep rates steady, with the federal funds rate still at 3.50%-3.75%. The vote was unanimous.
Figure 1: US Interest Rates & Bond Yields (1998 - 2026)
Source: XTB Research, 17.06.2026
What is significantly more important than the decision itself, is the Dot Plot - a projection of the FOMC interest rates going forward. We've seen an upward revision to its entire path. Quite a substantial one, considerably above what market was expecting. We can definitely consider this to be a hawkish shift from the committee. Half of the policymakers (9/18) are now expecting a rate hike before the end of the year. A third (6/18) foresees two hikes as the baseline scenario.
Figure 2: FOMC Dot Plot (2026 - 2028+)
Source: FOMC, 17.06.2026
The repricing of US rates is very sharp, with markets now fully pricing in a hike by the end of the year and seeing 2 rate increases by mid-2027 as the baseline scenario.
The statement... The statement is a rather unusual one. Although it is true that chairman Warsh has underlined that he wants Fed to stop explaining everything so explicitly in recent days, we did not expect it to go this far. The entire document is 132-word long and You can read it in roughly 35 seconds.
Fed Shocks Markets: Slower Growth, Inflation Surge, and Rates "Higher for Longer"
BREAKING: USD extends gains to 0.8% after the FOMC Conference
Daily Summary: Will the Fed shake the market?
Warsh to bring back lower rates?
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