June Fed Decision Delivered: Rates Held Unchanged but Dot Plot Significantly Raised, 9 Back Continued Rate Hikes in 2026.

June Fed Decision Delivered: Rates Held Unchanged but Dot Plot Significantly Raised, 9 Back Continued Rate Hikes in 2026.

By Andy Chen, Jun 17, 2026 6:25 PM

On June 17, Eastern Time, the Federal Reserve's latest interest rate policy statement indicated that it chose to hold rates steady at this meeting, maintaining the federal funds rate in the range of 3.50% to 3.75%, while keeping the monetary policy framework of ample reserves in the banking system unchanged.

Despite disruptions from uncertainties arising from the Middle East conflict, the U.S. economy continued to expand at a solid pace, supported by strong productivity and corporate capital expenditures, a balanced labor market, and a generally stable unemployment rate.

Affected by supply shocks in sectors such as energy, inflation remains significantly above the 2% policy target. The Fed stated that it will hold its policy line and make every effort to restore price stability.

Changes in the dot plot

The dot plot released with this Federal Reserve interest rate decision sent a clear hawkish signal. The median rate on the dot plot was recorded at 3.8%, a sharp upward revision from the 3.4% projected in March.

The dot plot shows a wide distribution of members' projections, with the lowest forecast at around 3.5%, while the most hawkish member believes the appropriate rate for the full year needs to be maintained near 4.5%. The vast majority of members' rate expectations are concentrated in the 3.5%-4.2% range, with only a tiny minority projecting rate cuts below 3.5% this year.

Of the 19 officials, only 18 submitted dot plot projections. Among these 18 officials, one believed there should be a cumulative rate hike of 75 basis points over the remainder of 2026, five favored a cumulative hike of 50 basis points, three supported a cumulative hike of 25 basis points, eight believed rates should be kept unchanged, and one projected a cumulative rate cut of 25 basis points.

Overall, Fed officials now generally expect the number of rate cuts in 2026 to shrink significantly, with only a limited number of cuts initiated during the year. The federal funds rate will remain in high territory for a prolonged period, extending the high-interest-rate cycle.

For headline PCE inflation, officials raised the median forecast for year-on-year growth of the Personal Consumption Expenditures price index in 2026 to 3.6%, significantly higher than the 2.7% projected in March.