Fed Keeps Rates at 3.5%-3.75% on June 18, Signals Hawkish Pivot with Hike Expectations

According to the Federal Reserve, the central bank held the federal funds rate target range at 3.5%-3.75% on June 18, with the policy statement passing on a unanimous 12-0 vote. This marks the first time since mid-2025 that no dissenting votes were cast. Fed Chair Powell's successor presided over the decision, which maintained rates unchanged for the fourth consecutive meeting since January.

The policy statement underwent substantial revisions under new leadership, restructuring format and removing forward guidance language. Economic projections reflect a more cautious outlook: 2026 GDP growth forecast was cut from 2.4% to 2.2%, while PCE inflation was raised from 2.7% to 3.6%. The rate decision dot plot shifted sharply hawkish, with nine Fed officials now projecting rate hikes this year versus only one predicting cuts, compared to twelve projecting cuts in March's forecast.