(Kitco News) – The Federal Reserve announced on Wednesday that the first Federal Open Market Committee (FOMC) vote under new chair Kevin Warsh was unanimous in favor of a rate hold, as expected by the market consensus, while the latest economic projections showed nearly half of policymakers believe a rate hike will be warranted in 2026.
Gold drops below $4,300/oz as Fed votes 12-0 in favor of rate hold, but nearly half of policymakers see a rate hike in 2026Kitco NEWS has a diverse team of journalists reporting on the economy, stock markets, commodities, cryptocurrencies, mining and metals with accuracy and objectivity.
Our goal is to help people make informed market decisions through in-depth reporting, daily market roundups, interviews with prominent industry figures, comprehensive coverage of important industry events and analyses of market-affecting developments. – The Federal Reserve announced on Wednesday that the first Federal Open Market Committee vote under new chair Kevin Warsh was unanimous in favor of a rate hold, as expected by the market consensus, while the latest economic projections showed nearly half of policymakers believe a rate hike will be warranted in 2026.
“The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate,” the Federal Reserve said in their statement. “The Committee reaffirmed its policy of maintaining ample reserves in the banking system. ” “Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” the central bank said.
“Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. ” “Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy,” the statement acknowledged.
“The Committee will deliver price stability. ”All 12 FOMC members voted in favor of maintaining rates unchanged, including newly appointed chair Kevin Warsh as well as Trump’s second-term appointee Stephen Miran, who has dissented in favor of a rate cut at every prior meeting since joining the FOMC. Gold prices dropped sharply in the wake of the announcement, with spot gold last trading at $4,290.52 per ounce for a loss of 0.94% on the session.
The unanimity displayed at today’s meeting is unlikely to persist, however, as the Fed’s latest Summary of Economic Projections showed that nine of the central bank's 19 policymakers expect that a rate hike will be necessary in calendar year 2026. None had that view just three months ago, when the Fed last published its projections. At the time that the March SOP was published, none saw a rate hike this year.
Moreover, six out of the nine – nearly one-third of the committee – believe one quarter-point rate hike will not be enough to get inflation moving sustainably back toward the Fed’s 2% target. Eight Fed policymakers indicated they expected rates would remain unchanged, while only one believed a single rate cut would be justified in 2026.
One policymaker did not submit their view on the projected rate path, and though they were not named, the abstainer is widely believed to be Warsh, as he has been a frequent critic of the forward guidance included in the Fed's forecasts. is a Crypto and Market Reporter for Kitco News. He has over 15 years of experience as a writer, editor, broadcaster and producer for media, educational and cultural organizations.
Ernest began working in market news in 2007, establishing the broadcast division of CEP News in Montreal, Canada, where he developed the fastest web-based audio news service in the world and produced economic news videos in partnership with MSN and the TMX. He has a Bachelor's degree Specialization in Journalism from Concordia University. You can reach Ernest at 1-514-670-1339.
The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.
Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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