Federal Reserve Monitor: June FOMC Preview: Changing of the Guard

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Federal Reserve Monitor: June FOMC Preview: Changing of the Guard

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June 12, 2026 02:27 PM GMT

Morgan Stanley & Co. LLCMFederal Reserve Monitor | North America Michael T Gapen

Chief US Economist

June FOMC Preview: Changing Michael.Gapen@morganstanley.comMatthew Hornbach +1 212 761-0571

Strategist

Matthew.Hornbach@morganstanley.com +1 212 761-1837

of the Guard Jay Bacow

Jay.Bacow@morganstanley.com +1 212 761-2647

We expect the Fed to stay on hold and remove its easing bias. Martin W Tobias, CFA

The SEP likely revises up 26-27 core inflation and delays Fed StrategistMartin.Tobias@morganstanley.com +1 212 761-6076

funds rate cuts. In the press conference, we expect Chair Warsh Sam D Coffin

to acknowledge both inflation risks and the possibility of faster EconomistSam.Coffin@morganstanley.com +1 212 761-4630

productivity. Diego Anzoategui

Economist

Diego.Anzoategui@morganstanley.com +1 212 761-8573

Arunima Sinha

Global Economist

Arunima.Sinha@morganstanley.com +1 212 761-4125

Key expectations Heather Berger

• We expect the Fed to maintain the target range for the Federal Funds Heather.Berger@morganstanley.com +1 212 761-2296

rate at 3.50-3.75% while removing the easing bias from the FOMC Lingdi Xu

statement. Lingdi.Xu@morganstanley.com +1 212 761-2957

Andrew M Watrous

• In the SEP, we expect little change to the median FOMC participant's

projections for growth and unemployment, but a higher outlook for Andrew.Watrous@morganstanley.com +1 212 761-5287

both headline and core PCE inflation. We expect the median member Mark T Schmidt, CFA

to project no change in the policy rate in 2026, and 50bp in reduction Mark.Schmidt1@morganstanley.com +1 212 296-8702

by 2028. That said, we expect 2-3 participants project 50-75bp of Shaun Zhou