Fed projections point to a rate increase in 2026

The Federal Reserve’s latest projections indicate that many officials expect at least one rate increase in 2026, though the outlook was shaped by Chairman Kevin Warsh’s decision not to submit a forecast. In the updated summary of economic projections, nine of 18 officials saw the federal funds rate ending 2026 above its current range of 3.5% to 3.75%. The median estimate placed the rate at 3.8% by the end of next year, up from 3.4% in March. The Fed left interest rates unchanged at the end of its June meeting, which was the first under Warsh. He said at his news conference that he did not submit a personal dot because he believed it was not helpful for policy decisions. Warsh also said the central bank will review how it communicates policy by the end of the year, including its press conferences, dot plot, meeting schedule, transcripts and minutes. He has suggested the Fed should reduce the amount of forward guidance it provides.