Summary

• At the June FOMC meeting, Chair Kevin Warsh and policymakers left the fed funds rate unchanged at 3.50%–3.75%, but rising inflation pressures and a firmer labor market suggest the Fed’s focus is shifting away from an easing bias.
• The FOMC faces a complex backdrop as Middle East-related energy risks, lingering inflation concerns and AI-driven demand pressures offset the fading effects of tariffs, reinforcing the case for a patient policy stance.
• Following the June FOMC meeting, markets have begun pricing the possibility of future rate hikes by late 2026 or early 2027, making short-duration and Treasury floating-rate strategies increasingly relevant if economic momentum persists.

By Kevin Flanagan

Once again, the Federal Open Market Committee (FOMC) decided to remain ‘on hold’, keeping the fed funds trading range at 3.50%-3.75%. This result was largely expected by the markets. Of course, one of the more notable aspects to this