Fed Dot Plot Signals No Rate Cuts in 2026, Hikes Possible

Fed Dot Plot Signals No Rate Cuts in 2026, Hikes Possible

Jun 17, 2026

The Federal Reserve's latest dot plot, which outlines policymakers' interest rate projections, indicates a significant change in central bankers' expectations. According to the source from Yahoo Finance, rate cuts are now almost certainly not expected for the remainder of the year, and there is a notably increased likelihood of a rate hike before the end of 2026.

Nine of the policymakers who took part in the exercise projected at least one increase, with six of them suggesting that multiple hikes could be possible. New Fed Chairman Kevin Warsh did not participate in the dot plot. He stated during a press conference that while he encourages his colleagues to continue offering projections, he has personally refrained from providing any of his own, consistent with his long-held views.

This left the forecasts from the other 18 members of the Federal Open Market Committee, who submitted their projections anonymously, evenly divided. Nine policymakers project higher rates, while the other nine indicated that interest rates will remain unchanged or be lower by the end of 2026. The median forecast for interest rates at the end of 2027 remains unchanged at the current range of 3.50% to 3.75%.

This projection marks a sharp departure from the outlook released in March, which had maintained a median forecast for one rate cut in 2026 and two cuts by the end of 2027. The new forward guidance follows the central bank's unanimous decision to hold rates steady at 3.50% to 3.75% during Warsh's first meeting as chair. The Fed also released a shorter policy statement this week, dropping language from March that had signaled its next move would be to cut rates.

Chairman Warsh has indicated he is looking to limit or phase out this quarterly exercise in forward guidance. He told lawmakers during his confirmation that he does not believe in forward guidance, arguing that the Fed tells the whole world its projections and then holds onto those forecasts longer than it should. Warsh has suggested he may seek to discontinue the tool, which was first created in 2012, but doing so would require the committee's consensus. He announced on Wednesday that a new communications task force will review the Fed's overall strategy.

Gregory Daco, chief economist at EY-Parthenon, told Yahoo Finance that this might be the last time the dot plot is seen, which would make it harder for markets to decipher what the Fed is going to do.