FOMC Decision Update — 17 June 2026
The Federal Reserve held the federal funds target range at 3.50%–3.75% on 17 June 2026, where it has stood since December 2025. The Federal Open Market Committee (FOMC) voted 12–0, in Kevin Warsh’s first meeting as Fed Chair.
The hold was widely expected; the surprise was underneath it. The committee’s updated dot plot now shows a median year-end 2026 rate of 3.8%, up sharply from 3.4% in March — a flip from a projected cut to an implied hike. Nine of 18 officials pencilled in at least one rise this year, and 17 of 18 judged inflation risks tilted to the upside. The statement was shortened and stripped of its earlier easing bias.
Post-decision levels (19 June 2026): GBP/USD around 1.34, EUR/USD around 1.143 — the dollar firmed as markets repriced toward higher-for-longer US rates.
When Is the Next Fed Interest Rate Decision?
The next Fed interest rate decision is on Wednesday 29 July 2026, announced at 2:00 PM US Eastern Time, followed by a press conference from Chair Kevin Warsh at 2:30 PM ET.
FOMC meeting dates 2026:
- 27–28 January — held at 3.50–3.75%
- 17–18 March — held at 3.50–3.75% (dot plot)
- 28–29 April — held at 3.50–3.75%
- 16–17 June — held at 3.50–3.75% (12–0; dot plot turned hawkish)
- 28–29 July — next decision
- 15–16 September (dot plot)
- 27–28 October
- 8–9 December (dot plot)
The Fed publishes updated economic projections at four of its eight meetings — March, June, September and December — so the 29 July meeting will not carry a new dot plot.
What Is the Current US Interest Rate?
The current US federal funds target range is 3.50%–3.75%. It has been held at this level since December 2025, following three 0.25-point cuts in September, October and December 2025. The federal funds rate is the most important interest rate in the US economy: it influences borrowing costs, savings rates, and — because the dollar is the world’s reserve currency — global exchange rates. For how that feeds into the pound, see our GBP/USD forecast.
Why Did the Fed Hold but Signal Possible Hikes?
US inflation is rising. US CPI inflation reached 4.2% in May 2026 (Bureau of Labor Statistics), the highest annual rate since April 2023 and a third consecutive monthly acceleration, driven mainly by an energy-price shock linked to the conflict in the Middle East. Energy prices were up 23.5% year-on-year. Core CPI, which strips out food and energy, was 2.9% — firmer, but far below the headline, suggesting much of the spike is energy-led rather than broad-based.
That split explains the decision. The committee held because growth is solid and core inflation has not yet broken higher, but it raised its projections because policymakers want to guard against the energy spike becoming entrenched in wages and prices. The Fed lifted its year-end PCE inflation projection to 3.6%, from 2.7% in March.
Anthony Bull, CEO of Cambridge Currencies, comments: “This was a hawkish hold, not a dovish one. The Fed didn’t move, but it told markets the next move is more likely to be up than down — and the dollar responded immediately. For UK businesses paying US suppliers, or anyone moving money in or out of dollars over the summer, that repricing matters. A forward contract lets you fix today’s rate ahead of the 29 July meeting rather than betting on the outcome.”
Fed Rate Forecast: Will US Interest Rates Go Up or Down in 2026?
The base case for 29 July is a hold at 3.50%–3.75%, with the dot plot now leaning toward at least one rise before year-end rather than a cut. The market debate has shifted from when the Fed cuts to whether it has to hike if the energy-driven inflation spike persists. Much depends on the June and July CPI prints and on whether Middle East energy pressures ease.
| 29 July scenario | Likelihood | USD impact |
|---|---|---|
| Hold at 3.50–3.75%, hawkish tone | Higher | USD-positive — EUR/USD could ease toward 1.13, GBP/USD toward 1.32–1.33 |
| Hold at 3.50–3.75%, neutral tone | Moderate | Broadly neutral for the dollar |
| Hike to 3.75–4.00% | Lower, but live for later meetings | Strongly USD-positive |
| Cut to 3.25–3.50% | Low in 2026 | USD-negative — GBP/USD could push above 1.36 |
Scenarios reflect Cambridge Currencies’ reading of the June dot plot and market pricing; they are not Federal Reserve forecasts, and rates may move either way. See our currency forecasts hub for fuller analysis.
What the Decision Means for Currency Transfers
The dollar sits on one side of most major currency pairs, so the Fed’s stance ripples far beyond the US. A hawkish Fed tends to strengthen the dollar, making dollars more expensive to buy and weighing on GBP/USD and EUR/USD.
- UK businesses paying USD invoices: a stronger dollar raises the sterling cost of US suppliers — see how exchange rates affect UK business.
- Buying US property or moving large sums: dollar strength cuts overseas purchasing power — see transferring large amounts internationally.
- Expats and dollar earners: if you earn in dollars and spend in sterling or euros, Fed-driven moves change your real take-home.
Markets often move before announcements — the dollar firmed on 17 June on the projections, not a rate change — so waiting for the decision can mean the move has already happened. Clients commonly use a forward contract to lock today’s rate ahead of 29 July, or split a large transfer either side of the meeting to average their rate. The gap between UK and US rates is itself a key GBP/USD driver — see our next Bank of England interest rate decision update.
Frequently Asked Questions
When is the next Fed interest rate decision?
The next Federal Reserve decision is on Wednesday 29 July 2026, at 2:00 PM US Eastern Time, with a press conference at 2:30 PM ET. The remaining 2026 FOMC meetings are 15–16 September, 27–28 October and 8–9 December.
What is the current US interest rate?
The current US federal funds target range is 3.50%–3.75%. The Fed held it there on 17 June 2026 in a unanimous 12–0 vote — the first decision under new Chair Kevin Warsh.
Will the Fed cut or raise rates in 2026?
After the June meeting, the Fed’s own projections point to rates ending 2026 higher than today, with nine of 18 officials expecting at least one hike and only one expecting a cut. A near-term cut now looks unlikely while US inflation runs at 4.2%, though the path depends on whether the energy-driven price spike fades.
Why did the Fed hold rates on 17 June?
Growth is solid and core inflation, at 2.9%, has not yet broken sharply higher, so the committee judged it could wait. It raised its rate and inflation projections to guard against the energy-led inflation spike — headline CPI of 4.2% — becoming more persistent.
How does the Fed affect the pound and the euro?
The federal funds rate, and expectations of where it goes next, shape the dollar’s value against other currencies. A higher or “higher for longer” US rate tends to strengthen the dollar and pull GBP/USD and EUR/USD lower; signals of cuts tend to weaken it.
Should I wait for the next Fed decision before transferring dollars?
Markets usually price expected decisions in advance, so waiting often means the move has already happened. A forward contract lets you lock today’s rate and removes the need to time the meeting. Cambridge Currencies works with clients to plan dollar transfers around FOMC dates.
Speak to a Cambridge Currencies specialist about timing your dollar transfer around the next Federal Reserve decision. Request a free quote and we’ll talk through your options. Every transfer is completed by phone with a dedicated specialist who knows your situation.
Cambridge Currencies Ltd is not FCA-authorised. We work exclusively with FCA-authorised payment partners Currencycloud (FRN 900199) and ScioPay (FRN 927951). This is general market information, not guidance on a specific transaction; exchange rates move and past movements are not a guide to future rates.
Related guides: USD forecast 2026 · GBP/USD forecast · Next Bank of England rate decision · What is a forward contract?
