Kevin Warsh’s debut as Fed chair keeps rates steady, signals hawkish tilt

The Federal Reserve, under new chair Kevin Warsh, held its latest policy meeting unanimous and left the target range for the federal funds rate unchanged at 3.50‑3.75 %. Warsh abstained from the Summary of Economic Projections and indicated the Fed would drop its forward‑guidance practice, creating working groups to review communication, balance‑sheet policy and the role of new technologies.

The statement highlighted solid US economic growth but noted inflation remaining well above the 2 % target, with core rates near 3.8 %. The dot‑plot showed several committee members still anticipating hikes later in the year. Markets reacted negatively: the S&P 500 fell more than 1 % and Bitcoin slipped below $75 000. Analysts described the meeting as more hawkish than expected, warning that the Fed may prioritize price stability over full‑employment considerations.

The decision also drew attention to Mexico’s central bank, Banxico, whose rate differential with the US has narrowed, prompting commentary on how any future US hikes could affect Mexican policy.