The Federal Open Market Committee convenes Tuesday and Wednesday, June 16 and 17, for its fourth policy meeting of 2026, and the outcome is close to a foregone conclusion: the Committee is widely expected to hold the federal funds rate at 3.50% to 3.75%, leaving the U.S. prime rate at 6.75% for a seventh straight meeting. CME FedWatch pricing implies roughly a 98% probability of no change. The decision lands at 2:00 p.m. ET on Wednesday, followed by Chair Kevin Warsh’s press conference at 2:30 p.m. The real market-moving content will not be the rate itself but the updated Summary of Economic Projections, including the dot plot that shows where each official expects rates to go through 2028. This is the first such projection set since March, and it arrives against the hottest inflation backdrop in three years. May consumer prices rose 4.2% from a year earlier and producer prices jumped 6.5%, both driven by an energy spike tied to the Iran conflict. The question for Wednesday is no longer whether the Fed holds, but whether its officials signal any cuts at all for the rest of 2026. For a full calendar of the year’s remaining decisions, see our Federal Reserve meeting schedule.
- The FOMC meets June 16 and 17 and is expected to hold the federal funds rate at 3.50% to 3.75%.
- The U.S. prime rate stays at 6.75%, where it has held since December 2025.
- May CPI rose to 4.2% year over year and producer prices jumped 6.5%, the hottest readings since 2023.
- Wednesday brings a fresh Summary of Economic Projections, including the closely watched dot plot.
- CME FedWatch pricing implies roughly a 98% chance of no change at this meeting.
What the Fed Is Expected to Do on Wednesday
The mechanics are straightforward. The FOMC sets a target range for the federal funds rate, and that range has stood at 3.50% to 3.75% since the Committee’s last cut. The effective rate has been printing near 3.62%. The June 12 H.15 release from the Federal Reserve confirms the bank prime loan rate at 6.75%, the figure banks publish as the federal funds upper bound plus the long-standing 300 basis point convention. CME FedWatch put the odds of a hold near 98% in the days before the meeting, and no voting member has signaled appetite for a change at this session.
The case for standing pat is clear. Inflation has reaccelerated rather than cooled, and a June energy shock pushed headline prices higher just as the Committee weighed its next step. Cutting into that print would risk unanchoring inflation expectations; hiking would jolt a labor market that is steady but slowing. The path of least resistance is to wait, gather more data, and let the new projections do the talking. Readers tracking the monthly prints can follow them on our U.S. inflation tracker, which logs each CPI and PCE release as it lands.
The Dot Plot Is the Real Event
Four times a year the Fed publishes a Summary of Economic Projections alongside its decision, and Wednesday is one of those meetings. The document collects each of the 19 officials’ forecasts for growth, unemployment, inflation, and the federal funds rate. The rate forecasts are plotted as anonymous dots, one per official, which is why the chart is known as the dot plot. The March dots showed a median path with limited cuts ahead. With inflation higher now than it was in March, the central question is whether the new median shifts toward fewer cuts, or even pencils in a hike, for the back half of 2026.
This is also Warsh’s first projection round as Chair, and the statement language will be parsed word by word for any shift in the Committee’s characterization of inflation risk. A median dot that removes the last expected cut would be read as hawkish and could lift Treasury yields and push mortgage costs higher, even with the funds rate unchanged. A median that holds its prior path would suggest officials still view the energy spike as temporary. Either way, the projections, not the rate decision, will set the market reaction. Our Fed rate forecast for 2026 breaks down the scenarios that flow from each outcome.
The Data Backdrop: Hot Inflation, Steady Jobs
The inflation data the Committee carries into the room is the firmest in three years. The Bureau of Labor Statistics reported May consumer prices up 0.5% on the month and 4.2% from a year earlier, the first reading above 4% since 2023, with core CPI at 2.9%. The producer side ran hotter still. Final demand producer prices rose 1.1% in May and 6.5% over 12 months, and final demand goods jumped 2.8%, the largest monthly gain since the series began in December 2009. More than 80% of that goods advance came from a 10.7% surge in energy, and gasoline alone climbed 23.4% on the month. Our coverage of the May CPI report details the energy pass-through.
The labor side gives the Fed room to wait. The May employment report showed nonfarm payrolls up 172,000, well above the consensus near 80,000, with the unemployment rate steady at 4.3% and average hourly earnings up 3.4% from a year earlier. Consumers, however, remain uneasy. The University of Michigan’s preliminary June sentiment index rose to 48.9 from May’s record low of 44.8, its first gain in four months, as gasoline relief filtered through. Year-ahead inflation expectations eased to 4.6% from 4.8%, and the long-run measure fell to 3.4% from 3.9%. Those expectations still sit well above the Fed’s 2% goal, which is exactly why officials are reluctant to cut.
What the Decision Means for Your Money
A hold keeps the prime rate at 6.75%, and that is the number most household borrowing costs hang on. Variable credit card APRs, which track prime plus a margin, stay in the low-to-mid 20% range, and home equity lines tied to prime do not move. There is no relief coming this week for anyone carrying a balance. The mechanics of that link are laid out in our guide to how the Fed affects your loans, and the latest movement across card and loan products sits on our consumer credit rates page.
Mortgage rates are a separate story. They follow the 10-year Treasury yield, near 4.5% ahead of the meeting, rather than the funds rate directly, so a hawkish dot plot could push 30-year quotes higher even with the Fed on hold. Current pricing sits on our current mortgage rates page. Savers, meanwhile, keep the upper hand a while longer: top high-yield savings accounts and CDs still pay well above 4%, and a hold means those yields hold too. The best current offers are tracked on our best high-yield savings accounts roundup.
Watch the dot plot and the first question at Warsh’s 2:30 p.m. press conference more closely than the rate line itself. The median 2026 dot tells you whether officials still expect any cut this year, and the Chair’s framing of the energy spike signals how durable they think this inflation is. If you have been waiting to refinance a mortgage or pay down a HELOC, plan around a multi-quarter horizon rather than a near-term cut. Lock decisions on the 10-year yield, not on hope for a Fed pivot.
Frequently Asked Questions
Will the Fed raise or cut rates on June 17?
Neither is expected. Markets put the probability of no change near 98% heading into the meeting, which would keep the federal funds target at 3.50% to 3.75% and the prime rate at 6.75%. A cut is off the table because inflation reaccelerated to 4.2% in May, and a hike is unlikely because the labor market is slowing even though it remains solid. The more consequential signal will be the updated dot plot, which shows whether officials still expect any rate cuts before the end of 2026. The decision is released at 2:00 p.m. ET on Wednesday, June 17.
What is the prime rate right now?
The U.S. prime rate is 6.75%, confirmed by the Federal Reserve’s June 12 H.15 release. It has held at that level since December 2025. The prime rate is not set by the Fed directly; banks publish it as the top of the federal funds target range plus a 300 basis point convention. Because the funds target has been 3.50% to 3.75%, prime sits at 6.75%. As long as the FOMC holds on Wednesday, prime stays put. It is the benchmark most variable consumer products use, including many credit cards, home equity lines of credit, and some personal and small business loans.
What is the dot plot and why does it matter?
The dot plot is part of the Summary of Economic Projections the Fed publishes four times a year. Each of the 19 policymakers marks where they expect the federal funds rate to sit at the end of the next few years, and those marks are plotted as anonymous dots. The median dot is read as the Committee’s collective rate path. It matters on June 17 because inflation is higher than it was at the March projections, so the market wants to know whether officials have removed expected cuts or added a possible hike. A more hawkish median can move Treasury yields and mortgage rates even when the funds rate itself does not change.
Why is inflation rising again in 2026?
Energy is the main driver. The conflict involving Iran pushed oil and gasoline prices sharply higher this spring, and that fed straight into both consumer and producer price indexes. In May, gasoline prices rose 23.4% at the producer level, and energy accounted for more than 80% of the monthly jump in final demand goods. Headline CPI hit 4.2% year over year, the first reading above 4% since 2023. Core inflation, which strips out food and energy, was tamer at 2.9%, which tells the Fed the surge is concentrated in energy rather than broad based. Whether it stays contained is the key uncertainty officials face heading into the meeting.
How does the Fed’s decision affect my mortgage and credit cards?
Credit cards respond fast. Most variable APRs are tied to the prime rate, so a hold means your card rate does not move and stays in the low-to-mid 20% range for most borrowers. Home equity lines tied to prime are unchanged too. Mortgages work differently. A 30-year fixed rate tracks the 10-year Treasury yield, near 4.5% before the meeting, not the funds rate, so mortgage quotes can drift on the tone of the projections and the press conference rather than on the rate decision itself. If the dot plot reads hawkish, long-term yields and mortgage rates can rise even though the Fed left its policy rate alone.
When is the next FOMC meeting after June?
After the June 16 and 17 meeting, the FOMC’s next scheduled decision is in late July, followed by a Summary of Economic Projections meeting in September. The Fed holds eight regularly scheduled meetings a year, and only four of them, including June and September, come with updated projections and a dot plot. That makes Wednesday’s release the last full forecast picture until September. You can track every remaining 2026 decision, with the projection meetings marked, on our Federal Reserve meeting schedule page.
Watching the June 17 Decision and the Dot Plot
The rate decision on Wednesday is close to settled, but the projections are not. The median dot and the statement language will tell borrowers and savers whether 2026 still holds any cuts, or whether a hot energy print has pushed the next move further out. For continuous tracking, the current prime rate page, the Fed rate forecast for 2026, and the inflation tracker are updated as each release lands. The decision posts at 2:00 p.m. ET, with Chair Warsh’s press conference 30 minutes later.
References
- Board of Governors of the Federal Reserve System. “FOMC Calendars, Statements, and Minutes.” federalreserve.gov
- Board of Governors of the Federal Reserve System. “H.15 Selected Interest Rates, June 12, 2026.” federalreserve.gov
- U.S. Bureau of Labor Statistics. “Consumer Price Index, May 2026.” bls.gov
- U.S. Bureau of Labor Statistics. “Producer Price Index, May 2026.” bls.gov
- U.S. Bureau of Labor Statistics. “Employment Situation, May 2026.” bls.gov
- Federal Reserve Bank of St. Louis. “Federal Funds Effective Rate (FEDFUNDS), FRED.” fred.stlouisfed.org
- CME Group. “FedWatch Tool.” cmegroup.com
