The Federal Reserve released minutes from its June 16-17, 2026, meeting, detailing a "hawkish hold" under new Chair Kevin Warsh. While the Committee unanimously kept the federal funds rate at 3.50%–3.75%, the Summary of Economic Projections revealed a divided board, with nine of 18 officials projecting at least one more rate hike this year. The median 2026 rate forecast rose to 3.8% from 3.4% in March, driven by concerns that inflation has exceeded the 2% target for over five years.
Markets remained pressured by the hawkish Fed tone and rising Middle East tensions, with the S&P 500 and Nasdaq down 0.61% and 0.77% respectively. The 2-year Treasury yield held near 4.18%, reflecting a flattening curve. The minutes underscored a structural shift toward reduced forward guidance, providing the Fed more flexibility to respond to volatile energy prices.