Fed holds rates steady, pares down statement to remove cutting bias

WASHINGTON – Kevin Warsh's first meeting as Federal Reserve chairman concluded Wednesday with no change in interest rates, the removal of key language indicating a bias toward future cuts, and a dramatically shorter policy statement. The Federal Open Market Committee voted unanimously to keep its benchmark overnight borrowing rate anchored in a range of 3.5%-3.75%. The federal funds rate has held there since the central bank lowered rates by three-quarters of a percentage point in the latter part of 2025. With a bevy intrigue over Warsh taking the central bank helm, the meeting followed the same pattern as the others this year regarding rates but differed otherwise. Fed officials, through their closely watched "dot plot" grid, removed their prior outlook for a rate cut this year and indicated that a hike is possible though not certain. However, the projections were missing the participation of one member, with Fed watchers suspecting that Warsh would not be submitting his outlook. A note attached to the projection materials indicated that 18 of the 19 meeting participants submitted rate and economic projections. Because the dot plot is an anonymous compilation of expectations, it was not possible to determine if it was Warsh who did not submit projections. But Fed watchers leading up to meeting had widely expected Warsh not to participate in the SEP. Some suspect he may try to end the feature altogether. An additional dot was missing for 2028 projections. …