Last night’s Federal Reserve FOMC meeting highlights (5-sentence summary):

1. Interest rate unchanged: The Federal Reserve decided unanimously by a 12-0 vote to keep the target range for the federal funds rate at 3.50%-3.75%, marking the fourth consecutive decision to hold steady, in line with broad market expectations.
2. Dot plot turns hawkish: The latest economic projections show that nearly half of officials expect rates to be higher than the current level by the end of 2026, with potential rate hikes during the year; the median forecast rose to 3.8%, tightening noticeably compared with earlier expectations.
3. Inflation remains the core concern: Officials focused on energy prices and the risk of stubborn inflation, and believe that the current high interest rates need to be maintained for longer; they even view moderate rate hikes in the future as reasonable, with risks skewed to the upside.
4. New Chair Wosh’s cautious debut: Wosh shortened the policy statement, removed language that leaned dovish, and launched task force reforms to the Fed’s operations, emphasizing policy flexibility while sending a more cautious signal.
5. Clear market reaction: After the meeting, U.S. stocks fell, Treasury yields rose, and the U.S. dollar strengthened. Investors digested a higher probability of rate hikes, and the overall tone shifted from rate cuts to heightened caution for “higher for longer.”