Warsh held rates. Everybody expected that. What nobody expected — or at least, what the market hadn't priced — was the dot plot. Nine of the eighteen Fed officials now project at least one rate hike before the end of 2026. Six of them want more than one. The median dot moved from 3.4% in March to 3.8% today — a quarter point above where rates sit right now. That's not a hold. That's the Fed telling you rates are going higher. Then Warsh walked to the podium for his first press conference and said five words that changed everything: "I can't give you any guidance." He dropped forward guidance. Gone. No more telling the market what comes next. The Dow gave back 507 points after hitting a record that morning. The S&P fell 1.21%. The Nasdaq shed 1.34%. SpaceX fell for the first time since going public. And the 2-year yield jumped 11 basis points — the bond market's way of saying: the next move is a hike, and it's closer than you think.
The Dow opened at a record — its third straight intraday high — then fell 507 points by the close. The S&P 500 lost 1.21%. The Nasdaq dropped 1.34%. The selling started at 2:00 PM when the Fed released its statement and dot plot, eased briefly at 2:30 when Warsh announced five task forces to overhaul the Fed's operations, then accelerated into the close as the market digested what the dots were saying. By 4:00 PM, every major index had hit its lowest point of the session.
| The Numbers I Circled |
At the close, June 17 · Day change |
|
| FOMC Dot Plot |
9 of 18 want hikes |
median 3.8% |
| 2-Year Yield |
4.153% |
+11 bps |
| May Retail Sales |
+0.9% m/m |
vs +0.5% est |
| S&P 500 Sectors |
Day change |
|
| Financials |
|
+0.4% |
| Energy |
|
+0.2% |
| Health Care |
|
−0.2% |
| Utilities |
|
−0.4% |
| Consumer Staples |
|
−0.6% |
| Industrials |
|
−0.8% |
| Materials |
|
−1.0% |
| Real Estate |
|
−1.2% |
| Consumer Discretionary |
|
−1.4% |
| Communication Services |
|
−1.5% |
| Information Technology |
|
−1.8% |
| Biggest Losers |
Day change |
|
| Notable Gainers |
Day change |
|
| SpaceX SPCX |
first red day |
|
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The morning told a different story. May retail sales came in at 0.9% — nearly double the 0.5% expected. The consumer is still spending. The economy is still growing. Chips rallied early. JPMorgan hit an all-time high, its first since January. The market was up heading into 2:00 PM. Then the dots came out.
SpaceX fell for the first time since going public on Friday. After four straight sessions of gains — rising 56% from its $135 IPO price to $219 — the stock gave back ground as the broader tech selloff pulled everything lower. The 2-year yield surged 11 basis points to 4.153%. The 10-year rose 4 basis points to 4.469%.
Trump added a footnote from the G7 in France. He said the Iran deal "isn't final" and that he'll "go right back to dropping bombs" if he doesn't like the agreement. Oil bounced on the comment. The ceasefire remains unsigned. The signing ceremony is still set for Friday in Switzerland — while the market is closed for Juneteenth.
What The Market Is Pricing In
Stocks don't price today. They price the next six to twelve months. And what the market priced in the last two hours of trading today is a Fed that's done cutting and is now looking up, not down.
Here's the chain. CPI at 4.2%. PPI at 6.5%. Retail sales at 0.9% — nearly double expectations. Jobs at 172,000. The economy isn't slowing. Prices aren't falling. And now the dot plot says half the Fed wants to raise rates. The median dot at 3.8% means the typical Fed official expects rates to end the year a quarter point higher than today. Three months ago, that same median dot was 3.4% — meaning they expected to cut. The dots shifted by 40 basis points in one quarter. That's not a rounding error. That's the entire second half of 2026 getting rewritten.
But the bigger move was the guidance. Every Fed chair since Bernanke has used forward guidance — telling the market in advance what the Fed plans to do with rates. It gives investors a roadmap. It reduces surprises. Warsh killed it in his first press conference. "I can't give you any guidance on what we're going to do next." Five task forces. A rewritten statement. The easing bias removed. The message: this is a new Fed. We're not going to hold your hand. We're going to look at the data and decide meeting by meeting. On Wall Street they have a phrase for when the central bank stops telling you what comes next — they call it data dependence. It means the Fed will react to what happens, not announce in advance what it plans to do. The problem with data dependence is that it makes every data release a potential market-moving event. If the Fed won't tell you where rates are going, then every CPI print, every jobs report, every retail sales number becomes a coin-flip for the market.
Nine of 18 dots want hikes, the median dot shifted 40 basis points in one quarter, and the new chair just killed forward guidance — and the market is now telling you that the second half of 2026 will be driven by data, not promises, and that means more volatility, not less. Goldman's Kay Haigh said it well: "Our base case remains that the Fed can just about avoid hikes, but the path is narrow and there will be a high premium on the incoming inflation data." The path is narrow. That's the sentence. If inflation falls because the Iran deal holds and oil keeps dropping, the dots don't matter — they'll shift back. If inflation stays hot or the deal falls apart, the hike is coming.
I watched Powell's first meeting in February 2018. He held rates and gave a slightly hawkish press conference. The market sold off. Within two weeks the S&P had corrected 10% — the first correction in two years. Warsh went further today. He didn't just sound hawkish. He dropped guidance, let the dots speak, and told the market he wouldn't be a hand-holder. That's a bigger signal than Powell gave. The question is whether the market treats it the same way.
Three things I'm watching:
01 — Iran signing Friday June 19 in Switzerland
Markets are closed for Juneteenth. The signing ceremony is scheduled while Wall Street is dark. If the deal is signed and the Strait reopening is confirmed, Monday opens with a gap up and oil tests $70. If Trump's "go right back to dropping bombs" comment from today turns into action — or if the terms fall apart — Monday opens red. The market just got hawkish dots and a deal that isn't signed. Both are hanging over the long weekend.
02 — The 2-year yield direction
The 2-year jumped 11 basis points today — the biggest one-day move in months. The 2-year yield is the market's best guess about where the Fed goes next. At 4.153%, it's now above where it was before the Iran deal was announced. That tells you the bond market is pricing the dots, not the deal. If the 2-year keeps rising toward 4.3%, the rate-hike trade is alive. If it falls back below 4%, the market is fading the dots and betting Warsh holds.
03 — SpaceX in week two
SPCX fell for the first time Wednesday. After four sessions of gains and a 56% pop from the IPO price, the stock gave back ground as the tech selloff hit everything. The Nasdaq-100 adds SpaceX in about two weeks. Until then, the stock trades on momentum and sentiment — not index flows. If it holds above $180, the pullback is healthy. If it breaks $160, the IPO price of $135 becomes the floor everyone is watching.
Warsh held rates and dropped guidance. The dots went hawkish. The Dow gave back 507 points. The 2-year yield jumped 11 basis points. And the Iran deal isn't signed yet. Tomorrow is the last trading day before a long weekend with an unsigned deal and a new Fed that won't tell you what comes next. Hold on.
That's it for today. See you tomorrow after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
