US Fed June Policy Decision: Status Quo, with a Hawkish Message

The June US Fed monetary policy verdict came in as expected with Fed pausing and maintaining the federal funds rate in the range of 5.00 per cent to 5.25 per cent with no dissent on the decision. The macroeconomic and federal funds rate projections, however, underwent notably hawkish revisions, which have tempered expectations of a pivot in the policy within this year. The dot plot is particularly hawkish with median forecast for the year-end 2023 fed funds rate at 5.6 per cent vs. 5.1 per cent as per March projection, with as many as 12 members expecting rate to be at this level or higher.