Fed begins Warsh era with rate hold, sees hike possible later in 2026

The US Federal Reserve, under new Chairman Kevin Warsh, held rates steady and removed prior language signalling further rate cuts this year. Updated dot-plot projections show nine officials now anticipate a rate hike by the end of 2026, and short-term futures are pricing a greater chance of a September hike than a hold. Treasury yields rose, US stocks fell modestly, and the dollar strengthened, signalling a hawkish turn that is likely to pressure emerging market equities and currencies including the Indian rupee.