Bitcoin Magazine
Fed Signals Possible Rate Hikes as Kevin Warsh Opens ‘New Chapter’ at Central Bank
The Federal Reserve held interest rates steady at its June meeting, but signaled a shift toward tighter policy under new Chair Kevin Warsh, marking a decisive turn away from expectations of near-term easing.
The Federal Open Market Committee left the federal funds rate unchanged at a range of 3.50% to 3.75%, in line with market consensus. The policy statement and updated projections, however, pointed to renewed concern over inflation and a growing willingness among policymakers to raise rates later this year.
Officials now expect the benchmark rate to reach 3.8% by the end of 2026, up from a 3.4% projection in March. Rate expectations for 2027 and 2028 also moved higher, signaling that restrictive policy may remain in place for longer than previously anticipated.
The shift comes as inflation pressures persist across the U.S. economy. The Fed now forecasts headline personal consumption expenditures inflation at 3.6% for 2026, with core inflation at 3.3%, both above prior estimates.
Policymakers pointed to supply shocks tied to the Middle East conflict and elevated energy costs as key drivers.
“Economic activity is expanding at a solid pace despite elevated uncertainty,” the Fed said in its statement, while reaffirming its commitment to restoring price stability.
Bitcoin’s price has dropped after the announcement, trading near $64,000.
BREAKING: Federal Reserve officially leaves interest rates unchanged. pic.twitter.com/ah1GKCZR7a— Bitcoin Magazine (@BitcoinMagazine) June 17, 2026
Kevin Warsh takes the helm as Fed chair
The meeting marked Warsh’s first as Fed chair following his confirmation last month. His arrival appears to have influenced both tone and communication strategy. The post-meeting statement was shorter and omitted language that had previously suggested a bias toward rate cuts.
All voting members supported the decision, with no dissent for the first time in a year.
Updated projections showed that nine officials now expect at least one rate increase by year-end. In March, none had forecast a hike in 2026.
Futures markets moved in response, with traders pricing in a quarter-point increase by October and a high probability of a second move by early 2027.
Treasury yields rose following the announcement, with the two-year yield climbing to around 4.14%. Equities and crypto assets also reacted. Bitcoin fell from near $66,000 to around $64,000 before stabilizing, while the S&P 500 and Nasdaq 100 each dropped close to 1%, erasing earlier gains.
A ‘good family fight’
Warsh used his first press conference to frame the decision as part of a broader shift in how the Fed approaches policy and communication. He described the meeting as a “good family fight” and emphasized that the central bank is entering a “new chapter.”
He declined to provide forward guidance