The Daily Froth: FLASH June FOMC - A Cold Warsh for the Doves

Research evidence excerpt

The Daily Froth: FLASH June FOMC - A Cold Warsh for the Doves

Economics

U.S. Economics

The Daily Froth: FLASH June FOMC - A Cold Warsh for June 17, 2026

the Doves

Anyone who was hoping for a dovish Kevin Warsh to show up today, was left disappointed. Following a hawkish

SEP and a bare-bones policy statement, Chair Warsh delivered a press conference that was singularly focused on

inflation and the Fed's commitment to restoring price stability. While he implied that he would not have supported

a rate hike at today's meeting, it was clear that he would be willing to tighten policy if inflation pressures fail to

moderate in the coming months.

To be sure, although nine participants penciled in a 2026 hike, that likely doesn't equal to a majority of voting

members. We continue to see a plausible path in which softer labor market data this summer, combined

with a reversal of the OBBB and World Cup-related boost to inflation and activity, allows the Fed to remain

patient. But after today's meeting, that path appears narrower. The Committee has shifted in a distinctly hawkish

direction, and the new Chair made clear that returning inflation to 2.0% is his overriding objective. If progress

toward that goal stalls, tightening remains very much on the table. Markets moved materially today, with markets

looking for 1.5 hikes by year-end, up from 0.8 before the meeting.

FOMC Statement

Among the many changes to the June FOMC statement, the most noticeable was its length, which was reduced from

roughly 340 words in April to just ~130 words this month. The revised statement placed greater emphasis on the Fed's

inflation objective and removed references to its employment mandate. These changes appear less about signaling a