The Federal Reserve maintained the benchmark interest rate between 3.50% and 3.75% on June 17. New Chairman Kevin Warsh led his first policy meeting and eliminated forward guidance on future policy moves.
Updated economic projections show approximately half of policymakers now expect at least one rate hike by the end of 2026. This forecast reverses the March projection of a rate cut. The Fed also increased its 2026 inflation outlook.
The S&P 500 dropped approximately 1.2% following the announcement. Investors sold equities as they priced in the potential for higher-for-longer interest rates.