17/06/2026 03:46 - Economia
Edificio de la Reserva Federal de Estados Unidos en Washington DC con arquitectura neoclásica, columnas imponentes y bandera estadounidense, iluminación dramática de atardecer que refleja la solemnidad del momento institucional
Kevin Warsh, the new Chairman of the Federal Reserve appointed by President Donald Trump, presides this week over his first Federal Open Market Committee (FOMC) meeting facing a formidable challenge: US inflation surged to 4.2% year-over-year in May, the highest level in three years and more than double the 2% mandate.
Warsh, who assumed office on May 22, 2026, replacing Jerome Powell, arrives with a clear playbook: lower interest rates, a reduced balance sheet, and less transparency in communications. He has labeled this strategic pivot a "regime change."
Macroeconomic reality clashes directly with Warsh's aspirations:
Context: Core inflation excludes volatile food and energy prices, providing a clearer view of underlying inflation trends. The 2% target is the Fed's dual mandate goal for price stability.
Current target range for the federal funds rate
Probability of holding rates: 96% according to Reuters
No economists expect rate cuts at this FOMC meeting.
Decision announced Wednesday, June 17 at 18:00 UTC.
Market consensus is clear: the Fed will hold the benchmark rate at its current range. Galloping inflation closes any door to monetary easing in the short term.
Warsh has pledged to reformulate central bank communications. Expected changes include:
Forward guidance is when central banks communicate their future policy intentions to shape market expectations. Reducing it increases uncertainty but gives the Fed more flexibility.
The dot plot shows each FOMC member's rate projections. Warsh may skip adding his own dot or eliminate it entirely—a major transparency rollback.
Could return to quarterly conferences instead of after every meeting
The Fed is scheduled to publish its Summary of Economic Projections (SEP), where all 19 FOMC members provide forecasts on growth, inflation, employment, and interest rates.
Announcements of a preliminary agreement between Washington and Tehran have triggered a decline in oil and natural gas prices, cooling expectations of rate hikes for late 2026.
Market Impact:
The VIX, known as the Fear Index, measures expected market volatility. A drop signals increased investor confidence.
Tiffany Wilding, economist at PIMCO—the world's largest active fixed-income manager—cautions:
"The main risk to watch is a potential disconnect between a committee leaning toward a more restrictive stance and a Chairman whose own convictions on inflation appear more constructive."
During the swearing-in ceremony, President Donald Trump delivered a surprisingly conciliatory message:
"I want Kevin to be totally independent. Don't look at me, don't look at anyone, do your job and do a great job."
However, Jerome Powell, Warsh's predecessor, remains at the Fed—breaking with tradition—as a bulwark against political interference. The Board of Governors is more divided than ever between:
Context: Hawks prioritize fighting inflation even if it means slower growth. Doves prioritize economic stimulus and employment. Warsh has historically been considered hawkish but has recently advocated for lower rates—a position causing friction.
The EUR/USD pair traded at 1.1578 in early Tuesday hours, awaiting the FOMC decision. Fixed income and currency markets will react strongly to any signals regarding:
| Scenario | Probability | Expected Impact |
|---|---|---|
| Hold rates unchanged | 96% | Market stability |
| 25 bps hike before end of 2026 | 66% | Dollar strengthening |
| 50 bps hike for December | 23.5% | Significant volatility |
Basis points (bps) are 1/100th of a percentage point. A 25 bps hike means rates would rise by 0.25%.
On Wednesday, June 17 at 12:30 UTC, the US will release May retail sales, with consensus expecting a +0.5% monthly increase. This data could influence the debate on private consumption strength.
Sources: Investing.com | El País | Reuters | Morningstar | PIMCO
Alfredo S. Quiroga
