The Federal Reserve kept its benchmark interest rate unchanged at a target range of 3.50 to 3.75 percent on Wednesday, with incoming chair Kevin Warsh presiding over his first Federal Open Market Committee meeting and post-decision press conference since taking office.

The decision was unanimous and widely anticipated. Markets had priced in a near-certain hold going into the meeting, with the main focus on the updated economic projections and dot plot, which maps out where individual committee members expect rates to go over the next two years.

Warsh, who was nominated by President Trump and confirmed by the Senate in early 2026, used the press conference to outline his approach to monetary policy in terms that investors interpreted as more hawkish than his predecessor. He said the committee would remain data-dependent and emphasised that the fight against inflation was not fully complete, noting that services inflation remains elevated even as goods prices have cooled.

The updated dot plot drew particular attention. Several analysts had expected the projections to show one more rate cut in 2026, but the median dot was revised to show no additional cuts this year, pushing the first projected easing into 2027. That shift was slightly more restrictive than market consensus had assumed, and bond yields rose modestly following the release.

The Fed’s statement acknowledged continued progress toward the 2 percent inflation target but noted that the labour market remains healthy and that the committee sees no urgency to ease policy further. The statement retained the phrase “attentive to the risks on both sides of its dual mandate,” signalling that inflation and employment are being weighted roughly equally in current deliberations.

Warsh was questioned at length about the relationship between the Fed and the Trump administration, following a period of public pressure from the White House on the previous chair to cut rates more aggressively. Warsh said the Fed operates independently and makes decisions based on economic data, not political considerations.

The next FOMC meeting is scheduled for late July. Markets are currently pricing in a low probability of a rate cut at that meeting, with September seen as the earliest realistic window for any easing if inflation data continues to improve.

Wednesday‘s decision keeps the federal funds rate at its highest level in over a decade, reflecting a policy stance that has remained restrictive for longer than many economists initially projected.