Kevin Warsh will take to the podium to deliver his first remarks as Federal Reserve chair on Wednesday.
Investors are nearly unanimously expecting the Fed to hold rates steady, shifting the focus to other signals coming out of the meeting of what’s next for the US central bank.
Warsh succeeded Jerome Powell, who is now a Fed governor. He was initially seen as more dovish than his predecessor, since Trump nominated him, but there are some hawkish expectations heading into Wednesday. The press conference marks the new Fed chair’s chance to set expectations under his leadership.
Beyond the rate decision itself, here are three things that investors are keeping an eye on during the meeting.
1. A fresh dot plot
Investors will get a look at where FOMC see rates heading going forward as well as an assessment of how divided the members’ outlooks are.
The Fed will release its Summary of Economic Projections which includes the dot plot. Each dot represents a FOMC member’s outlook for rates in 2026 and beyond.
“It has the potential to be even more impactful than normal given the change in leadership, the change in composition in the FOMC and inflation that is stubbornly above target,” Daniel Murray deputy CIO and global head of research at EFGAM said.
The dot-plot could be one official short with Bank of America signaling they don’t expect Warsh to partake. Previously he has said he wants to do away with the Fed providing forward looking guidance like the dot-plot.
Investors went from pricing in two to three rate cuts in 2026 to weighing potential rate hikes.
2. Warsh’s tone
Since the market is broadly in agreement that the Fed will hold rates steady, the question becomes will it be a dovish hold or a hawkish hold.
Bank of America surveys found that most (55%) fund managers expect a hawkish hold while a third expect a dovish hold.
The new Fed chair’s commentary and tone will be a critical part of the meeting for investors assessing what’s next for the Fed.
Historically, Warsh has been a hawk and he did come off as more hawkish than many expected in his confirmation hearing.
Interactive Brokers senior economist José Torres flagged that the US-Iran deal helps Warsh with optics heading into to meeting.
“The sharp drop in energy costs immediately prior to the inaugural Warsh-led FOMC offers favorable first-impression dynamics and raises the likelihood of an increasingly patient central bank willing to look through the current short-term inflation as a one-time shock,” he wrote.
3. Impact on asset prices
Stocks are near record highs after earnings strength more than offset the Iran war drawdown. The recent relief rally has carried equities further.
The June meeting comes in the lull between the first and second quarter earnings seasons when the market has less data points in the form of corporate reports to digest.
“Depending on the tone and how much this meeting reshapes investor expectations, it could dictate the market’s narrative for the next several weeks, at least until earnings season takes over,” eToro US investment analyst, Bret Kenwell, said.
Kenwell added: “Warsh takes over with stocks hovering near record highs and the labor market still looking solid, but with inflation reaccelerating. Investors are trying to figure out whether the new Fed chair will use his first major moment to reset expectations.”
