June FOMC Reaction: Hawkish Today, Reforms Tomorrow

Research evidence excerpt

June FOMC Reaction: Hawkish Today, Reforms Tomorrow

Idea

June 18, 2026 12:37 AM GMT

Morgan Stanley & Co. LLCMUS Economics and Fixed Income Strategy | North Michael T Gapen

America Chief US Economist

Michael.Gapen@morganstanley.com +1 212 761-0571

Matthew Hornbach

StrategistJune FOMC Reaction: Hawkish Matthew.Hornbach@morganstanley.com +1 212 761-1837

Jay Bacow

StrategistToday, Reforms Tomorrow Jay.Bacow@morganstanley.com +1 212 761-2647

Sam D Coffin

The statement, forecasts, and press conference were hawkish, Economist

Sam.Coffin@morganstanley.com +1 212 761-4630

with Warsh focused on restoring inflation to 2%, showing little Diego Anzoategui

concern about labor-market strength. We continue to be more EconomistDiego.Anzoategui@morganstanley.com +1 212 761-8573

optimistic on disinflation and forecast the Fed will remain on Arunima Sinha

hold this year. GlobalArunima.Sinha@morganstanley.comEconomist +1 212 761-4125

Heather Berger

Economist

Key points Heather.Berger@morganstanley.com +1 212 761-2296

Lingdi Xu

• The Fed held the target Fed Funds rate at 3.50-3.75%. The scaled- Economist

down statement removed its easing bias and focused on above-target Lingdi.Xu@morganstanley.com +1 212 761-2957

inflation. The dots showed nine members expect at least one hike this Andrew M Watrous

Strategist

year. Andrew.Watrous@morganstanley.com +1 212 761-5287

Martin W Tobias, CFA

• Warsh stressed the Fed's "commitment to deliver on our price

stability objective of 2%" and argued "inflation is a choice". On Martin.Tobias@morganstanley.com +1 212 761-6076

whether policy is restrictive, he thinks it is "uneven". He reiterated his Mark T Schmidt, CFA

opposition to forward guidance. Mark.Schmidt1@morganstanley.com +1 212 296-8702