MercoPress. South Atlantic News Agency

Fed keeps rates unchanged; new chairman Warsh anticipates FOMC summaries will be shorter…and to facts

Warsh acknowledged the changes to the committee’s statement. “It’s a bit shorter, a bit simpler and it dispenses with some older language,” he said.

The Federal Open Market Committee from the US Federal Reserve voted unanimously to keep its benchmark overnight borrowing rate anchored in a range of 3.5%-3.75%. It was the first meeting of the Fed with the newly appointed chairman, Kevin Warsh.

With expectations over Warsh taking the central bank helm, the meeting followed the same pattern as the others this year regarding rates but a much shorter policy statement from the FOMC, indicating future rate cuts.

The federal funds rate has held there since the central bank lowered rates by three-quarters of a percentage point in the latter part of 2025.

Warsh has been a critic of the current Fed forecasting tool as well as other forward guidance out of the committee including projections on unemployment, inflation and gross domestic product. At the media conference following the unchanged rate Warsh declined to share a forecast and announced he is forming task forces to overhaul major Fed operations.

“I did not submit a dot for me,” Warsh said. “It’s not helpful in the conduct of policy. I suspect by year-end, as I mentioned in my opening statements, there’ll be a review about communication broadly, press conferences, dots, meetings, and the like, transcripts, minutes. This will be part of that. I don’t want to prejudge the outcomes there, but I’m pretty open-minded about what they could be.”

Based on the 18 of 19 possible responses, the median estimate for the fed funds rate at the end 2026 is now 3.8%, up from 3.4% in the prior projections from March and signaling the committee sees at least one rate hike as necessary this year. Meeting participants were split on the path for rates this year, with eight expecting no change, one seeing a cut and nine anticipating at least one hike.

During the news conference, Warsh also acknowledged the changes to the committee’s statement. “It’s a bit shorter, a bit simpler and it dispenses with some older language,” he said. “That statement just gives you the facts, as best we can judge it.”

This week’s communique checked in at just 130 words, compared with 341 for the April 29 release following the most recent meeting. The statement offered just a brief summary of economic conditions followed by a vow to control inflation.

“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong,” the statement read. “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability,” the policymakers said.