Fed May Hike Again in 2026: Warsh's Abstention Sparks Forecast Division

The Fed's latest economic projections show one more possible rate hike in 2026, but the outlook is more complicated because new Chair Kevin Warsh did not submit his individual forecast.

Among 18 officials, nine predicted the federal funds rate would be above the current 3.5% to 3.75% range by end of 2026. However, Warsh's opinion appears missing from the projections; he confirmed at a press conference that he indeed did not provide any personal forecast.

The current median rate projection shows the federal funds rate reaching 3.8% by end of 2026. This figure is higher than the 3.4% given in the Fed's March Summary of Economic Projections, and 0.25 percentage points above the current target range.

Warsh, who just took over as Fed chair, has signaled a desire to overhaul the central bank's communication strategy. He believes officials may have provided too much forward guidance and devoted too much effort to planning the future monetary policy path.

Meanwhile, the Fed's policy statement underwent a more extensive rewrite than usual. In recent years, statement changes typically involved only a few words or sentences, but Wednesday's release was significantly shortened in length.