Story perspectives

Fed Holds Rates, Warsh Promises Stability, Hike Anticipated

6/19/2026

Summary

Story summary

The Federal Reserve (Fed) left its benchmark overnight rate unchanged at 3.5%-3.75% during Kevin Warsh’s first policy meeting.
Warsh said the committee will deliver price stability, drop forward-guidance language, and announce five task forces to review Fed operations.
Nine of 19 Fed officials now expect at least one hike this year, raising the median end-2026 projection to 3.8% and pushing two-year Treasury yields up 13 basis points to about 4.2%.

History

Historical Context

In July 1979 President Jimmy Carter appointed Paul Volcker as Federal Reserve chairman. Facing double-digit inflation, Volcker’s FOMC raised the federal funds rate from 11% to 12% on October 6, 1979 and to a peak of 17.6% by April 1980, triggering a recession that broke the stagflation of the 1970s. The Fed later abandoned money-supply targets in 1986, illustrating a lasting shift toward aggressive rate policy.

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Story summary

The Federal Reserve (Fed) left its benchmark overnight rate unchanged at 3.5%-3.75% during Kevin Warsh’s first policy meeting.
Warsh said the committee will deliver price stability, drop forward-guidance language, and announce five task forces to review Fed operations.
Nine of 19 Fed officials now expect at least one hike this year, raising the median end-2026 projection to 3.8% and pushing two-year Treasury yields up 13 basis points to about 4.2%.

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