Fed forecasts another 2026 hike; Warsh did not submit his own forecast

The Fed's latest economic projections show that another hike may come in 2026, but the outlook is more complicated because new Chair Kevin Warsh did not submit his own forecast.

Among the 18 officials, 9 projected that the federal funds rate will be above the current 3.5% to 3.75% range by the end of 2026. However, one participant's data appears to be missing, and Warsh confirmed at the press conference that he did not provide any personal forecast.

The current median rate forecast puts the federal funds rate at 3.8% by the end of 2026. That is above the 3.4% in the Fed's March Summary of Economic Projections and 0.25 percentage point above the current target range.

Warsh, who has just taken over as Fed chair, has signaled that he wants to thoroughly reform the central bank's communication strategy. He believes officials may have offered too much forward guidance and spent too much effort planning the future path of monetary policy.

Meanwhile, the Fed's policy statement also underwent a larger-than-usual rewrite. In recent years, statement changes were usually limited to a few words or sentences, but Wednesday's statement was heavily shortened.