Fed Rate Decision Highlights: Dot Plot Divergence Widens, Policy Wording Adjusted

Here are the highlights of the Fed's rate decision Wednesday:

The Federal Open Market Committee voted unanimously to keep the benchmark rate in the target range of 3.5% to 3.75%.

The "dot plot" reflecting rate forecasts showed divergence among officials on whether to hike by end-2026, with 9 of 18 officials projecting a hike; the median rate forecast rose to 3.75% from 3.4% in March, and the median also showed rates falling to 3.6% in 2027.

One Fed official did not submit any rate forecast; another provided no 2028 rate forecast.

The median Fed official forecast core inflation to be 3.3% by end-2026, up from 2.7% in March; GDP growth projected at 2.2%, down from 2.4%.

The Fed streamlined its policy statement, removed wording about possibly further adjusting rates, and stated that "the Committee will achieve price stability."

The Fed said, "Despite high uncertainty due to factors including the Middle East conflict, economic activity is expanding at a solid pace" and "productivity growth and capital investment are strong."

The Fed said employment growth "is keeping pace with labor force growth, and the unemployment rate has changed little"; inflation remains elevated, "partly reflecting supply shocks that have pushed up prices in sectors including energy."