The Federal Open Market Committee kept its policy rate unchanged at 3.50% to 3.75% after what Chair Warsh called “a good family fight,” with three dissenters preferring a rate increase.

The dissents came from Beth Hammack, Neel Kashkari, and Lorie Logan. Their opposition was notable in a meeting that featured unusual market uncertainty because Warsh has stepped away from forward guidance as part of his broader “Regime Change.” That left traders leaning more heavily on incoming data, market pricing, and the wording of the statement itself to interpret the Fed’s stance.

Without that guidance, the CME FedWatch Tool, which tracks the federal funds futures market, assigned a 33.7% probability of a rate hike and a 66.3% probability of no change only hours before the statement was released. In the Treasury market, the 2-month Treasury yield rose sharply last week, suggesting investors in that maturity had started pricing in a rate increase at this meeting. Those securities mature around the time of the Fed’s September meeting, but buyers still wanted compensation for the hike they expected at this meeting. After the statement was released, the 2-month yield immediately fell by 7 basis points.

The statement itself was notably short and contained no forward guidance. At 166 words, excluding contact information and links, it was much shorter than the 341-word statement issued at the previous meeting under Powell. Warsh’s move away from forward guidance was one of the first steps in his “Regime Change” at the prior meeting.

The statement placed greater emphasis on inflation than on the economy or labor market, a shift that had already begun in March under Powell. Beyond the vote count and the identification of the dissenters, the only textual change was a small wording adjustment:

New: “The Committee is continuing its policy of maintaining ample reserves in the banking system.”

Old: “The Committee reaffirmed its policy of maintaining ample reserves in the banking system.”

This was also a no-dot-plot meeting. In past years, the FOMC has released a Summary of Economic Projections, or SEP, quarterly after four of its eight meetings each year. The SEP includes the dot plot, which shows how each member sees the future path of policy rates, inflation, GDP growth, and unemployment.

The June meeting had been a dot-plot meeting, but Warsh, after declaring war on forward guidance, did not submit his projections in order to avoid providing guidance. That decision effectively began undermining the dot plot, and there may be no more dot plots in the future. If the FOMC releases another SEP, it would come after the September meeting.

The full statement read:

“The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote:

The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability.

Voting against the monetary policy action were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.”