{"id":2233,"date":"2026-06-17T18:41:46","date_gmt":"2026-06-17T18:41:46","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=2233"},"modified":"2026-06-17T18:41:46","modified_gmt":"2026-06-17T18:41:46","slug":"nearly-half-of-fed-policymakers-see-a-2026-rate-hike-in-the-cards","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=2233","title":{"rendered":"Nearly half of Fed policymakers see a 2026 rate hike in the cards"},"content":{"rendered":"
June 17 (Reuters) – Nearly half of Federal Reserve policymakers have lost faith that merely holding borrowing costs steady will be enough to bring inflation back down to their 2% target in the face of the oil price surge after the Iran \u200bwar.<\/div>
Nine of the U.S. central bank’s 19 policymakers now believe they will need to raise the Fed’s policy rate \u200cthis year, according to projections published on Wednesday as the Fed announced its decision to leave the policy rate in its current 3.50%-3.75% range. None had that view just three months ago, when the Fed last published its projections.<\/div>
Six of those nine, or nearly a third of the committee, \u200bfeel more than one quarter-point rate hike will be needed this year, the projections show.<\/div>
Eight believe that rates ought \u200bto stay unchanged, and just one felt a single rate cut would be in order. One \u2060policymaker, not named, did not submit a rate-path view.<\/div>
Those views, captured in the Fed’s so-called dot plot of individual policymaker’s rate-path \u200bviews, illustrate how quickly the debate within the central bank has flipped from a focus on how long to hold rates steady before \u200bcutting them, to a growing worry — and for a some, a conviction — that the Fed will need to raise rates to keep price pressures from higher fuel prices from seeping more broadly into underlying inflation.<\/div>
They also pose a challenge for new Fed Chairman Kevin Warsh, who was picked for \u200bthe job by President Donald Trump with the expectation that he cut interest rates, an option that becomes less feasible \u200bas broad support for such a move fades.<\/div>
Global oil prices have dropped sharply since last week when Iran and the U.S. announced a deal \u200cto \u2060end the conflict and get oil flowing through the Strait of Hormuz again. But it is not clear how quickly shipping and exports could recover after the agreement is signed, particularly given the damage that energy facilities sustained during the three-month war.<\/div>
Fed policymakers typically have the option of rewriting their dot-plot submissions until shortly before publication, so the views should reflect the latest developments \u200bin the Middle East.<\/div>
Inflation has been \u200brunning above the Fed’s \u20602% target for more than five years.<\/div>
The projections published on Wednesday show central bankers have become more pessimistic about inflation since March, reflecting the sharp rise in inflation since the start of \u200bthe war.<\/div>
Inflation by the personal consumption expenditures price index is now seen at 3.6% by the \u200bend of the \u2060year, based on the median policymaker view. In March policymakers expected year-end PCE inflation of 2.7%.<\/div>
Core PCE inflation, which strips out volatile oil and food prices, is now seen hitting 3.3%, compared with 2.7% previously.<\/div>
The unemployment rate is now projected at 4.3% by year-end, matching the \u2060actual reading \u200bin May and lower than the 4.4% policymakers had expected in March. \u200bThe forecast suggests increasing confidence that the labor market is not weakening or in need of support from rate cuts, as some policymakers had worried earlier \u200bthis year.<\/div>
GDP growth is seen at 2.2% this year, worse than the 2.4% forecast as of March.<\/div>