The Fed held rates steady for a fourth consecutive meeting, but the message was far from dovish.
• 9 of 18 officials still expect at least one rate hike this year; • The 2026 U.S. GDP growth forecast was lowered from 2.4% to 2.2%; • PCE inflation is now not expected to return to the 2% target until 2028; • The Fed reiterated that inflation remains elevated; • The decision was unanimous, with a 12-0 vote.
The takeaway: the Fed remains cautious and appears to be preparing for a more persistent inflation environment.