What did the Federal Reserve decide on interest rates, and what key signal did it send about future policy under the new 'Warsh era'?

The U.S. Federal Reserve left its key interest rate unchanged, as expected, but removed the 'easing bias' language from its policy statement — marking the start of the 'Warsh era'. Crucially, new quarterly projections show that nine Fed officials anticipate a rate hike before year-end, and economic projections reflect increased pessimism about inflation, with year-end PCE inflation now forecast at 3.6% for 2027 — up from 2.7% in March.

What major market reactions followed the Fed's decision, and which asset classes moved most significantly?

Following the Fed's decision, Wall Street stocks turned sharply lower, the dollar extended its gains, and U.S. Treasury yields crept higher. In equities, communications services (.SPLRCL) led the laggards while chips (.SOX) rose; SpaceX (SPCX.O) dipped. In commodities, front-month Brent and WTI crude settled up 1.0% and 0.8%, respectively, while gold turned negative post-Fed.

Trading Day: US Stocks End Lower, Dollar Jumps as Federal Reserve Kicks Off Warsh Era

Jun 17, 2026

US stocks declined and the dollar strengthened after the Federal Reserve held rates steady while signaling a potential hike later this year. Crude oil prices rose, and G7 leaders emphasized securing mineral supply chains amid ongoing geopolitical conflicts.

reuters

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