Fed rate decision highlights: wider dot-plot split and policy wording changes

Here are the key points from the Fed's Wednesday rate decision:

The Federal Open Market Committee voted unanimously to keep the benchmark rate unchanged in the 3.5% to 3.75% target range.

The dot plot, which reflects rate projections, shows officials are split on whether to hike by the end of 2026. Nine of the 18 officials expect a hike, and the median rate forecast rose from 3.4% in March to 3.75%; the median also shows rates falling to 3.6% in 2027.

One Fed official did not submit any rate forecast, and another did not provide a 2028 forecast.

The median Fed forecast shows core inflation at 3.3% by the end of 2026, above the 2.7% forecast in March, while GDP growth is seen at 2.2%, down from 2.4%.

The Fed streamlined its policy statement, removing language about the possibility of further rate adjustments and saying “the Committee will achieve price stability.”

The Fed said “despite a high degree of uncertainty arising from factors including the Middle East conflict, economic activity has continued to expand at a solid pace,” and “productivity growth and capital investment have been strong.”

The Fed also said job gains are “in line with labor force growth and the unemployment rate has changed little”; inflation remains elevated, “in part reflecting supply shocks that have boosted prices in sectors such as energy.”