Fed’s new chairman, Hwa Xu, is cautiously hawkish! He refuses to promise rate cuts to launch “Fed reform,” and the dot plot hints at a rate hike in 2026.

Federal Reserve (Fed) new Chair Kevin Warsh delivered his first FOMC press conference on the 17th, announcing that interest rates will remain in the 3.50%–3.75% range. He demonstrated a strong reform agenda during the meeting, not only removing the forward guidance for rate cuts but also refusing to submit his own dot plot forecasts. Recent data shows most officials expect one more rate hike by 2026, with hawkish signals causing U.S. stocks to decline, yields to rise, and risk assets to come under pressure across the board.
(Background: Warsh's debut as Fed Chair》Fed keeps rates steady, significantly raises inflation outlook in dot plot, and broadly hikes rate path)
(Additional background: Fed insiders comment on Warsh’s debut: New Chair needs to prove that "shutting up" is more powerful than "speaking")

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• Dot plot hints at rate hikes in 2026, Warsh refuses to submit forecast
• Initiate Fed reforms: less talk, balance sheet reduction, return to core mission
• Market interprets as hawkish, cryptocurrencies and other risk assets under pressure

The new era of the U.S. Federal Reserve, which the global financial markets have been highly watching, has officially begun. Kevin Warsh, the successor to Jerome Powell, presided over his first Federal Open Market Committee (FOMC) meeting on June 17, 2026. As expected, the decision kept the federal funds rate target range unchanged at 3.50% to 3.75%, marking a "wait-and-see" first step after taking office.

However, the real shocker of this highly anticipated maiden speech was the "style shift" signal from Warsh. The Fed’s latest policy statement officially removed the previous forward guidance hinting at "further easing," shifting to a more neutral and concise wording, signaling that the era of easy monetary policy is turning the page.

Dot plot hints at rate hikes in 2026, Warsh refuses to submit forecast

In the simultaneously released Summary of Economic Projections (SEP) and dot plot, a hawkish tone is evident. Due to recent supply shocks in energy and other sectors, the core PCE inflation forecast for 2026 has been revised upward; most officials (a total of 9) expect interest rates to be above the current range by the end of 2026, with the median rising to about 3.8%, implying that there may be "another rate hike before the end of this year."

Notably, Chairman Warsh himself "did not submit" his own dot plot forecast. He explicitly stated that this decision aligns with his long-standing criticism of the SEP structure; he believes the dot plot overly restricts the Fed’s policy flexibility and creates unnecessary noise and volatility in the markets.

Initiate Fed reforms: less talk, balance sheet reduction, return to core mission

At the press conference afterward, Warsh demonstrated a strong "reform-oriented Fed" resolve. He reiterated his push for comprehensive reforms at the Fed, with core principles including: improving communication by "saying less" to reduce officials’ noise, continuing to shrink the balance sheet, and relying more on traditional interest rate tools rather than excessive market intervention.

Warsh emphasized that the Fed should focus on its two core missions: "price stability and maximum employment." Confronted with still-acute inflation challenges, he refused to give clear guidance on future rate hikes or cuts, reaffirming that future decisions will depend on the latest data at each meeting, and that the Fed will steadfastly defend its independence.

Market interprets as hawkish, cryptocurrencies and other risk assets under pressure

Although Warsh’s debut did not immediately change the current interest rate stance, his tone—neutral leaning hawkish, extremely cautious, and downplaying forward guidance—already sent a chill through Wall Street.

With expectations of rate hikes reignited, the market reacted immediately after the decision was announced, with U.S. stocks falling slightly, the dollar index strengthening, and U.S. Treasury yields rising. For capital-sensitive assets like Bitcoin and the overall cryptocurrency market, the Fed’s "higher for longer" or even potential rate hikes are likely to exert significant short-term downward pressure, and investors should closely monitor subsequent economic data for actual changes.