On June 17, 2026, the Federal Open Market Committee voted 12–0 to hold the federal funds target at 3.5% to 3.75%, with interest on reserve balances at 3.65%, effective June 18. It was Chair Kevin Warsh's first meeting as chair, and the Fed signaled no rate cuts in 2026 under its updated projections.
What the Statement Said
The FOMC statement maintained a dual-mandate framing, noting inflation "running well ahead" of the 2% goal — a phrase Warsh repeated in his press conference — while acknowledging resilient activity. The Committee described deliberations as a "good family fight," with Warsh declining to add his own rate forecast to the Summary of Economic Projections, a departure from recent J. Powell-era practice.
Two operational decisions accompanied the hold: the Board voted unanimously to keep IORB at 3.65%, and the FOMC's implementation note reaffirmed the stance announced in the statement.
Warsh also announced five task forces to review areas of the Fed's conduct and monetary-policy framework — details to be released through 2026 — signaling reform intent even as rates stood pat.
What Borrowers Should Model
- No relief in 2026. Futures and the SEP both now price no cuts this year. If your floating-rate loan, line of credit, or credit-card APR is tied to prime (prime typically sits ~3 percentage points above the top of the fed funds range), expect the ~8.5–8.75% prime environment to persist.
- SBA and bank term pricing. SBA 7(a) variable rates and bank term loans priced off prime or SOFR plus spread will not reset lower. Underwrite acquisitions as if today's rate is the refinancing rate.
- CDs and savings yields stay elevated. The same hold that keeps borrowing expensive keeps deposit yields attractive — a cash-management opportunity for businesses holding working capital in money-market or Treasury sweep accounts.
Bookkeeping Implication
With rates flat, interest expense forecasting is simpler but not optional. Track interest by facility (Expenses:Interest:LOC, Expenses:Interest:TermLoan) and reconcile prime/SOFR resets to lender statements monthly — a 25-basis-point miss on a $500K line is $1,250 per year, worth catching.
Simplify Your Financial Management
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