Federal Reserve Holds Rates Steady as Officials Signal Potential Hikes Under New Chair Kevin Warsh

The Federal Reserve kept interest rates unchanged at 3.5% to 3.75% for a fourth consecutive meeting as inflation concerns dominated the first policy meeting chaired by Kevin Warsh. Updated projections showed policymakers increasingly expect higher borrowing costs through year-end, with inflation forecasts rising while economic growth and labor market expectations remained relatively stable.

• The FOMC unanimously voted to maintain the federal funds rate at 3.5%-3.75%.
• Roughly half of Fed officials projected one or more quarter-point rate hikes by the end of 2026.
• Only one policymaker projected a rate cut this year, while eight forecast no change.
• Fed officials raised their year-end inflation forecast to 3.6% and projected core inflation of 3.3%.
• The central bank forecast 2026 GDP growth of 2.2% and unemployment of 4.3%.
• The Fed removed language previously outlining conditions for future rate cuts, adopting a more neutral policy stance.

Relevant Companies

• JPMorgan Chase ($JPM) - Higher-for-longer interest rates can affect lending margins, deposit costs, and capital markets activity.
• Goldman Sachs ($GS) - Changes in rate expectations can influence trading, investment banking, and asset management activity.
• BlackRock ($BLK) - Interest-rate policy affects fixed-income markets, asset flows, and investment performance.

Editor’s Note: This is a developing story. This article may be updated as more details become available.