Warsh's Fed Debut Likely a Rate Snooze Fest: 72 Economitors Say Hold My 3.50%–3.75% 🎤

The U.S. Federal Reserve's first FOMC meeting under new Fed Chair Kevin Warsh is scheduled for June 17, and Wall Street analysts increasingly expect policymakers to leave the benchmark federal funds rate untouched at 3.50%–3.75% through the end of 2026. A Reuters survey of 102 economists conducted June 4–9 found 72 predicting rates will remain in that range for the remainder of the year, the most unified reading of 2026 against near-term cuts.

Markets have shifted in recent weeks, with interest rate futures now pricing in at least one potential rate increase by year-end. The change in tone follows stronger-than-expected U.S. employment data for May, which reduced expectations of imminent easing. Inflation remains a central concern for policymakers, with a separate poll projecting CPI inflation at 4.2% year-over-year in May and the Fed's preferred PCE Price Index at 3.8% in April.

Geopolitical stress has compounded price pressures. Economists cited Middle East energy market disruptions and the recent Israel-Iran strikes, which escalated before truce discussions, as factors keeping inflation elevated and complicating the path to rate reductions. The combination of a tight labor market and persistent inflation has narrowed the window for cuts, according to surveyed analysts.

"It's going to be very hard for the Fed to justify any action at this point and in the foreseeable future. It will be incredibly difficult to get a consensus of Fed officials to go along with the idea of cutting rates," said Tom, a Wall Street economist quoted in the survey. The comments reflect a broader consensus that the Fed's September and December meetings are more likely venues for any policy shift than the upcoming June 16–17 gathering, with the 3.50%–3.75% target range now seen as the resting place for rates through Warsh's debut and beyond.