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ToggleThe "Super Central Bank Week," which global financial markets have been holding their breath for, has reached its climax. The U.S. Federal Reserve (Fed) announced its latest Federal Open Market Committee (FOMC) decision at 2 p.m. Eastern Time on June 17, 2026. As widely expected, the Fed announced that it would maintain the target range for the federal funds rate at 3.50% to 3.75% , marking the second consecutive year that it has held rates steady.
This meeting also marked the debut of new Chairman Kevin Warsh, who succeeded Jerome Powell. However, the Summary of Economic Projections (SEP) and Dot Plot released alongside the resolutions delivered a clear hawkish signal to the market.
Inflation expectations revised sharply upwards! PCE surges to 3.6%
According to the latest median economic forecast, Federal Reserve officials' confidence in combating inflation has clearly been severely impacted by recent geopolitical events, such as the Middle East conflict. Data shows that the 2026 personal consumption expenditures (PCE) price index annual growth rate has been revised sharply upwards from 2.7% in March to 3.6% , while core PCE has also climbed to 3.3% .
Despite recent glimmers of peace between the US and Iran leading to a slight decline in international oil prices, the lagged effects of inflation still keep officials on their toes. Regarding economic growth, the 2026 real GDP growth rate has been slightly revised downward to 2.2%, while the unemployment rate is expected to remain stable at 4.3%, indicating a certain resilience in the US economy and giving the Fed the confidence to maintain high interest rates.
Dot plot hawkish: Higher and longer interest rates are a foregone conclusion
For cryptocurrency and risk asset investors, the most closely watched development is undoubtedly the change in the interest rate dot plot. This time, 18 members submitted their forecasts, and the latest data shows that FOMC members have across-the-board shifted their expectations for the future path of the federal funds rate upward. The median interest rate forecast for the end of 2026 jumped from 3.4% to 3.8% , and the forecast for 2027 also increased from 3.1% to 3.6% .
More notably, the "long-term interest rate forecast," considered a neutral interest rate indicator, has further increased to 3.1% . This means that even if the rate-cutting cycle resumes in the future, the overall cost of funding will remain at a high level for a long time, and the extremely low interest rates of the past era of massive easing are unlikely to reappear.
New Chairman Warsh's first battle: Policy shifts to neutrality.
Faced with severe pressure from rebounding inflation, the attitude of newly appointed Chairman Kevin Warsh at his first post-meeting press conference became the focus of global attention. Market analysts pointed out that the Federal Reserve has removed the previously dovish wording that hinted at "additional adjustments" from its statement, officially shifting its monetary policy stance to "more neutral" and cautious.
With the Federal Reserve prioritizing combating inflation, US stocks remained cautious ahead of the decision, while bond yields fluctuated due to waning expectations of interest rate cuts. For the Bitcoin and overall cryptocurrency markets, which are highly dependent on market liquidity, the significant reduction in interest rate cut expectations and continued pressure on funding in the current economic environment may present even more severe volatility in the short term.
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