Nine of 18 Fed policymakers project higher rates by 2026, lifting the median forecast above the current target range.
Federal Reserve officials projected one additional rate hike in 2026, raising the median federal funds rate forecast to 3.8%. This marks a 0.4 percentage point increase from the March projection and exceeds the current 3.5%-3.75% range.
The updated outlook reflects input from 17 of 18 policymakers, with one submission missing. The Fed did not disclose the absent participant, though speculation centers on new Chair Kevin Warsh, who has criticized excessive forward guidance. The March median forecast stood at 3.4% for 2026.
The Fed also overhauled its policy statement, reducing its length significantly. This aligns with Warsh’s push to simplify communications and reduce reliance on detailed rate projections.