Key points to note:
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Broad consensus maintained despite single dissent. The FOMC voted 11–1 to keep rates unchanged, with Governor Stephen Miran in favour of 25 bps cut.
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Inflation risks remain skewed to the upside. Powell noted “job gains have remained low”, “the unemployment rate has been little changed in recent months,” and “inflation remains somewhat elevated”. He also highlighted uncertainty surrounding Middle East developments, noting that higher energy prices could lift inflation in the near term.
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SEP signals sticky inflation and resilient growth. Inflation remains above target, with the Fed projecting PCE and core PCE at 2.7% in 2026 (vs. 2.4% / 2.5% previously), indicating a slower moderation in inflation, particularly in goods prices affected by tariffs. Notably, growth expectations have been revised higher, with GDP projected at 2.4% in 2026 (vs. 2.3%), reinforcing the view that the economy remains resilient.
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Powell to remain in role pending investigation. Powell reaffirmed that he has no intention of stepping down from the Board until the ongoing Department of Justice investigation is fully resolved. He also signalled openness to remaining as a Governor through 2028 and may serve as Chair pro tempore if a successor is not confirmed in time.
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