June FOMC recap: Rock Chalk, Warsh-hawk

Research evidence excerpt

June FOMC recap: Rock Chalk, Warsh-hawk

Deutsche Bank

Research

Economics Date

Fed Notes 17 June 2026

Matthew Luzzetti, Ph.D.

Chief US Economist

+1-212-250-6161

▪ New Fed Chair Kevin Warsh immediately put his stamp on the

Committee. In a return to 1990s-style communications, he significantly Brett Ryan

shortened the post-meeting statement – it was cut from 341 words to Senior US Economist

130 – and removed forward guidance. He also did not submit forecasts +1-212-250-6294

for the Summary of Economic Projections (SEP). Those projections,

Justin Weidner

completed by his colleagues, skewed undeniably hawkish, and Warsh did Economist

not distance himself from this signal in his press conference. +1-212-469-1679

▪ The median dot for 2026 showed half a hike, with nine officials projecting Amy Yang

higher rates this year (six projecting 50bps of hikes or more). The median Economist

dot for next year moved up to 3.625%, consistent with the current fed +1-212-250-9959

funds rate. The shift higher was motivated by a reassessment of inflation

persistence, with core PCE revised up to 3.3% for 2026 and 2.5% for

2027.

▪ In his press conference, Warsh leaned hawkish, emphasizing the

importance of restoring price stability, and noting that the Committee has

work to do on inflation. He argued that the evidence is mixed on how

restrictive policy currently is. Warsh also presented a positive picture of

the labor market and growth and did not emphasize dovish points (e.g.,

disinflationary forces from AI or trimmed mean).

▪ Warsh also announced the establishment of task forces in five areas: 1)

communications, 2) the balance sheet, 3) the use and reliance on data

sources, 4) productivity and jobs in the age of AI, and 5) the Fed’s inflation

frameworks.