US Economic Weekly

Research evidence excerpt

US Economic Weekly

Nomura | US Economic Weekly 18 June 2026

2027 and 3.375% for 2028), but higher than the consensus forecasts (Consensus: 3.375%

for 2027 and 3.125% for 2028). In the medium term, most FOMC participants believed

some policy easing would be appropriate, allowing the policy rate to converge toward

neutral. One dovish surprise was a slight decline in the median longer-run dot, which

unexpectedly fell to 3.063% from 3.125% previously. However, the mean of the longer-run

dots moved higher to 3.208% from 3.164% previously. The dispersed distribution of

longer-run dots indicates a wide range of views on the neutral rate.

Note that one unidentified participant (in addition to Warsh) did not submit a dot for 2028,

leaving the total number of 2028 dots at 17. We think it could be former Chair Powell,

whose term as a governor expires in January 2028.

The Summary of Economic Projections was also hawkish on net, as the median

projections for core PCE inflation for 2026-2028 were revised up, which suggests many

FOMC participants expected some lingering price pressures.

Fig. 3: The dot plot was more hawkish than expected

The December dot plot

Source: FRB, Nomura

Simplified policy statement with assurance of continuing the ample-reserve system

Chair Warsh successfully simplified the meeting statement, which was significantly shorter

than previously. It mentioned the policy decision and the Fed's assessment on economic

activity and inflation but omitted any forward-looking elements. Importantly, the statement

explicitly noted the Fed's intention to maintain "ample" reserves, which confirmed no

imminent changes to balance sheet policy.

Warsh’s press conference hinted at dovishness

While economic and monetary policy projections were hawkish on net, Warsh’s