Fed begins Warsh era by keeping rates on hold, sees one hike later this year

WASHINGTON — The Federal Reserve held interest rates steady on Wednesday, but policymakers expect a hike in borrowing costs later this year amid growing concerns about inflation lodged above the U.S. central bank's 2 percent target.

New quarterly projections showed nine Fed officials now anticipate a hike in rates by the end of 2026, and an updated policy statement removed language that had been used to flag the likelihood of further reductions in borrowing costs this year.

Indeed, the statement, in an early sign of new Fed Chairman Kevin Warsh's influence, removed any guidance about future rate moves altogether, with a revised format that simply stated the rate decision and reaffirmed the central bank's intent to keep "ample reserves in the banking system." The shortened document, a return to a format similar to that used by former Fed Chairman Alan Greenspan, was approved by a unanimous 12-0 vote by the central bank's Federal Open Market Committee.

The statement showed other signs of Warsh's early influence on the debate as he takes over after being appointed earlier this year by Pre