Warsh to bring back lower rates?

To begin with – a change in interest rates across the Atlantic today would be a sensation. Attention will therefore focus on two key aspects – the Committee’s interest rate projections and Kevin Warsh’s first press conference. The Fed’s new forecasts for economic growth and inflation will also be of note.

Figure 1: US Interest Rates & Bond Yields (1998 - 2026)

Source: XTB Research, 17.06.2026

The chairman chosen by Trump will face a difficult task. Many expect him to seek to please the president by adopting a dovish stance. At the same time, his message will be scrutinised closely by analysts around the world, who will be watching to see whether there is a significant discrepancy between Warsh’s statements and the signals coming from the rest of the Committee. If this is the case, the new chairman could lose investors’ confidence right from the start. It thus seems unlikely that he will opt for a very sharp shift in rhetoric.

Current conditions do not seem to allow much dovishness. That said, the signing of a memorandum between the US and Iran, scheduled for Friday, should make Warsh’s task somewhat easier, allowing him to take a somewhat more detached approach to the inflation risks that have recently been at the forefront. Crucially, his comments will be weighed against the Committee’s interest rate projections (the Dot Plot).

Ahead of the decision, the market remains unusually calm. Both the S&P 500 and the Nasdaq Composite are down 0.1% today, as is the dollar against the benchmark euro. The FOMC statement, which will be accompanied by the aforementioned Dot Plot and Warsh’s press conference, may put an end to this idyll.

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Michał Jóźwiak, Financial Markets Analyst at XTB