Fed rate decision highlights: wider dot-plot split, policy statement turns neutral

Here are the key takeaways from the Fed's Wednesday rate decision:

The Federal Open Market Committee unanimously voted to keep the benchmark rate unchanged in the 3.5%-3.75% target range.

The "dot plot," which reflects rate forecasts, shows a split among officials over whether to hike before the end of 2026, with 9 of 18 officials expecting a hike; the median rate forecast rose to 3.75% from 3.4% in March, while also showing rates falling to 3.6% in 2027.

One Fed official submitted no rate forecast, and another did not provide a 2028 forecast.

The Fed's median projections show core inflation at 3.3% by the end of 2026, up from the 2.7% forecast in March; GDP growth is expected at 2.2%, down from 2.4% previously.

The Fed trimmed the policy statement, removing language about the possibility of further rate adjustments and saying that "the Committee will achieve price stability."

The Fed said that despite high uncertainty from factors such as the conflict in the Middle East, economic activity is still expanding at a solid pace, with strong productivity growth and capital investment.

The Fed also said employment growth is keeping pace with labor-force growth and unemployment is little changed, while inflation remains elevated, reflecting in part supply shocks that have lifted prices in sectors such as energy.