Fed Chair Warsh Keeps US Rates Steady, Signals Hawkish Outlook

The Federal Reserve’s June policy meeting, the first chaired by Kevin Warsh, left the target federal‑funds rate unchanged at 3.5 %‑3.75 %. Warsh’s opening press conference eliminated forward guidance, shortened the statement to 132 words and warned that inflation remains above the 2 % goal. The dot‑plot showed half of the committee expecting at least one more rate hike in 2026, and the median forecast for the end‑2026 rate rose to 3.8 %.

Market reaction reflected the more hawkish tone: the dollar index climbed to about 100.8, Treasury yields edged higher (10‑year at ~4.5 %), and the S&P 500 fell roughly 1.2 %. Value‑added commodities such as gold, silver, platinum and palladium slipped as the stronger dollar pressed on price‑sensitive assets. Brent crude dropped about 6.7 % after the United States and Iran, mediated by Pakistan, revived a 14‑point agreement that re‑opened the Hormuz Strait and eased geopolitical‑risk premiums.

Crypto markets echoed the broader sell‑off. Bitcoin fell from a mid‑week high of $67,000 to around $64,000, while Ethereum modestly outperformed with a 3.6 % gain. Analysts linked the downturn to the Fed’s “hawk‑ish” stance and the removal of forward guidance, noting that higher‑rate expectations increase volatility across risk assets.