Headline: Fed Holds Rates, Raises Inflation and Rate Forecasts on June 17, 2026

The Federal Reserve on June 17, 2026, maintained its federal funds rate target range at 3.50% to 3.75%, aligning with market expectations. This unanimous decision by the Federal Open Market Committee (FOMC) marked the first rate meeting chaired by new Chairman Kevin Warsh. The Fed acknowledged robust economic expansion but noted inflation remains above its 2% target, partly due to the Middle East conflict's impact on energy prices. The FOMC's updated Summary of Economic Projections (SEP) revealed a more hawkish stance. The median forecast for the 2026 core Personal Consumption Expenditures (PCE) inflation rate was revised up to 3.3% from March's 2.7%, with the overall PCE inflation rate increasing to 3.6% from 2.7%. Officials now project the federal funds rate will remain higher for longer, with the median forecast for year-end 2026 increasing to 3.8% from 3.4%. Projections for 2027 and 2028 also saw upward revisions, indicating the Fed's commitment to price stability will likely require sustained higher interest rates.