The Fed Just Split 9 to 9 - And the Rally Got Its Answer

[00:00:00]Remember the dot plot I've been telling you to watch all week? It just dropped and it was hawkish. The Fed is now split right down the middle and half of them want to raise rates this year. Markets did not like it. Wednesday, June 17th, 2026. Your US market wrap. The day we've been building toward all week. The Fed held rates exactly as expected, but the rate decision was never the story. The dot plot was and it came in hawkish.

[00:00:28]Here's the detail that matters. The Fed is now split right down the middle. Of 18 officials, nine expect at least one rate hike this year and six of those see two or more. The other nine expect a hold or a cut. A perfect 9-9 divide.

[00:00:44]That's a deeply divided Fed. And the median forecast for year-end rates rose to 3.8% up from March. The market read that one way. The odds of a rate hike just went up. Treasury yields jumped and stocks fell. The S&P dropped 1.2%.

[00:01:01]Now Kevin Warsh's debut. He did something unusual. He did not submit his own dot to the plot. But in his press conference, he hammered one message.

[00:01:11]Price stability is the Fed's core principle. Translation, he's focused on fighting inflation, not cutting rates.

[00:01:19]Short-term markets are now pricing an October hike as basically a done deal.

[00:01:23]Two more things from Warsh worth knowing. He shut down any idea of raising the 2% inflation target. And he's forming a task force to review the Fed's $6.7 trillion balance sheet.

[00:01:35]Something he's criticized for years.

[00:01:37]This is Warsh signaling he runs a tighter, more hawkish Fed than his predecessor. First impression delivered.

[00:01:44]Inside the market, the big tech names led the drop. Microsoft, Meta, Google, Amazon all fell. SpaceX finally cooled too, down 4.9% snapping its streak. But here's the twist, chips actually rose.

[00:01:59]Broadcom, Micron, and Applied Materials gained, lifting the semiconductor index 1.4% against the tide.

[00:02:08]The rotation continues. The cleanest take came from Claudius Sum at New Century. The market reaction is simply about a dot plot that landed far more hawkish than anyone expected. So, the verdict is in. The Fed leaned hawkish, the rally got its answer, and higher for longer is back on the table. That's your market wrap. I'm Sol, your daily US market story in under 3 minutes. Markets move fast. I make them make sense. Okay, genuine question. The Fed is now split 9 to 9, as divided as it's been in years.

[00:02:43]Does a Fed that can't agree with itself make you more nervous, or does the split actually mean no big move is coming?

[00:02:50]Curious how you read it. If this helped today's chaos make sense, drop a like and subscribe so you don't miss tomorrow.