The Fed unexpectedly shifted to a more aggressive tightening stance, signaling officials’ growing concern that inflation may remain elevated. The dot plot shows nine officials now expect a rate hike this year and six project two or more 25bp increases, versus March when no policymaker forecast a hike and the committee expected a 2026 cut. Fed officials reiterated their determination to combat inflation. Deutsche Bank chief US economist Matthew Luzzetti said the risk the Fed will need to raise ra

The Fed unexpectedly shifted to a more aggressive tightening stance, signaling officials’ growing concern that inflation may remain elevated. The dot plot shows nine officials now expect a rate hike this year and six project two or more 25bp increases, versus March when no policymaker forecast a hike and the committee expected a 2026 cut. Fed officials reiterated their determination to combat inflation. Deutsche Bank chief US economist Matthew Luzzetti said the risk the Fed will need to raise rates has clearly risen. Markets reacted: equities fell sharply and government bond yields rose after the Fed statement and subsequent remarks.