Fed leaves rates unchanged following first FOMC meeting under Warsh

• Fed left interest rates unchanged, with a unanimous vote from all 12 members.
• The statement was significantly shortened, removing all explicit forward guidance.
• Real GDP is projected to fall to 2.2% this year, while unemployment is expected to remain steady at 4.3% through 2027.
• PCE inflation forecast was revised up to 3.6% for this year, with the 2% goal not expected until 2028.
• Forward guidance on interest rates indicates a pause for this year and next, with only one rate cut projected for 2028, and the Fed was close to forecasting a rate hike this year.

The Federal Reserve left interest rates unchanged, but its statement featured significant changes, including the removal of explicit forward guidance. Economic projections show a revised higher inflation forecast for this year and delayed rate cuts, with a pause expected through 2027 and only one cut in 2028.