Warsh holds rates steady at first Fed meeting, Iran deal eases oil risk
Fed starts its June meeting Tuesday, with traders looking past the likely rate hold on Wednesday and focusing on what new Chair Kevin Warsh will say after. The June 16-17 meeting includes an updated Summary of Economic Projections, according to the Fed’s calendar. That report brings the quarterly rate forecasts from policy makers. Reuters said the Fed is seen keeping its key overnight rate steady at 3.50%–3.75%. The main issue is whether Warsh will enter his own forecast in the Fed’s “dot plot.” Reuters reported that analysts aren’t sure if Warsh will offer a rate-path dot at all, since he’s been critical of forward guidance. Regions Bank Chief Economist Richard Moody wrote that Warsh might sit out the process “as a means of signaling how little regard he has for this exercise.” But JPMorgan Chief U.S. Economist Michael Feroli expects the opposite. “We expect Warsh will submit his own projections,” Feroli said. Not doing so, he argued, “would look like a spiteful dissent against his own committee.”
