Markets Expect Hold at Warsh’s First Fed Meeting June 17

Traders are pricing near-certainty that the Federal Reserve will keep its target federal funds rate at 3.50%-3.75% at the June 16-17 FOMC meeting, with the policy decision due on June 17. Market attention is focused on the Fed’s Summary of Economic Projections, known as the dot plot, and Kevin Warsh’s post-meeting press conference.

The CME Group’s FedWatch tool showed a 98.2% probability of no change on June 17 and a 1.8% chance of a 25-basis-point cut, with no probability assigned to a hike. Prediction markets tracked similar odds: Polymarket implied a 99.3% probability of a hold with $72.1 million in total trading volume, while Kalshi priced a 98% chance on $18.4 million of activity. On Polymarket, the bracket for a decline of 50 basis points or more drew $17.2 million of volume, suggesting some traders are hedging against larger moves.

Kevin Warsh was confirmed by the Senate on May 13 in a 54-45 vote and was sworn in on May 22, replacing Jerome Powell. The June meeting will be his first as Fed chair.

Recent economic data help explain the market consensus. The May jobs report showed 172,000 payrolls added. Measures of underlying inflation remain elevated, with some core personal consumption expenditures forecasts above 3%. Economists also point to tariff uncertainty, energy price volatility and geopolitical tensions as factors affecting the outlook.

Major financial firms have moved their expected timing for the first Fed rate cut further into the future; one large bank now projects the first cut in 2027. Market participants are watching the dot plot for signals on the expected timing of cuts through the remainder of 2026 and into 2027.

The White House applied public pressure on Fed policy across 2025, urging faster cuts and criticizing the prior chair. Market participants have cited that political backdrop when assessing Warsh’s first projections and his remarks at the press conference.