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Ghost of Jay Powell in Press Release

Published on June 17, 2026

Gerard MacDonell

The statement opens with a somewhat triumphant sounding proclamation that (effectively) Warsh is off to a zero-dissent start. This reminds me of Jay Powell’s suggestion at his last Press Conference as Chair that Warsh will probably be good at gaining consensus on the Committee. I thought Powell was just being polite. But so far he is right. Of course, this was achieved by Warsh joining the consensus, not by changing it.

Powell also mentioned that he has every confidence that the Fed will remain committed to achieving the 2% inflation objective. The Press Release channels that too by explicitly referencing 2% as the inflation target and by stating, briefly for effect, that the Committee will deliver price stability.

My own view is that commitment to the inflation target has probably weakened a bit, and I am not abandoning that take. Moreover, I bet if you polled Fed watchers for more than their modal guess you would find that I have company on this. 2% is the single most likely outcome and easiest single number to give. But the skew is to the right, which I do think is newish. When the NY Fed polls consumers on their inflation expectations they ask for the single most likely outcome and a probability distribution. That approach generates modes that look extremely high and with a skew to the left. I bet the professionals would be the opposite.

Having said that, though, the news today is to lean into that. And it is the news on the day that matters for the day, I guess.

Press Release

The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:

The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate. The Committee reaffirmed its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability.

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