Fed Forecasts One Rate Hike in 2026; Warsh Submits No Individual Forecast

The Fed's latest economic projections suggest one rate hike in 2026, but the absence of a personal forecast from new Chair Kevin Warsh adds uncertainty.

Among 18 officials, nine expect the federal funds rate to be above the current 3.5% to 3.75% range by end-2026. However, Warsh's personal opinion appears missing from the projections; he confirmed at the press conference he did not submit any individual forecast.

Currently, the median rate forecast shows the federal funds rate at 3.8% by end-2026. That level is above the 3.4% in the Fed's March SEP and 0.25 percentage points above the current target range.

Warsh, who just became Fed chair, has signaled a desire to reform the central bank's communication. He believes officials may have provided too much forward guidance and invested too much effort in mapping future monetary policy paths.

Meanwhile, the Fed's policy statement underwent a more extensive rewrite than usual. In recent years, statement changes typically involved just a few words or sentences, but Wednesday's statement was noticeably shortened.