The Federal Reserve held rates steady and removed language signaling potential cuts, signaling a shift in policy outlook.
The Federal Reserve kept its benchmark interest rate unchanged at 3.5%-3.75% following its latest policy meeting, marking the fourth consecutive hold. The decision was unanimous among Federal Open Market Committee members, maintaining the rate set after a 75-basis-point cut in late 2025.
The central bank also removed language from its statement that had previously indicated a bias toward future rate cuts. The closely watched ‘dot plot’ projections no longer reflect expectations for a rate cut this year, with officials now signaling a potential hike, though not guaranteed. One member’s projections were missing, fueling speculation that new Chair Kevin Warsh opted out of submitting his outlook.
Markets had anticipated the rate hold but were closely watching for shifts in forward guidance. The removal of the easing bias suggests a more cautious stance on inflation and economic growth.