The June 16 FOMC minutes confirmed what Chair Warsh telegraphed at the press conference: the committee is in no hurry to cut. The dot plot held the median at 3.50 to 3.75 percent for the rest of 2026, and the 2-year Treasury yield has spent the last six sessions rejecting any meaningful move lower. That is the story underneath the rate decision: the front end is now anchoring expectations, not the long end.

The Dot Plot Said It First

The June SEP kept the year-end funds rate at 3.625 percent and the 2027 median at 3.375 percent. That is a quarter-point of easing next year and a quarter-point the year after. The committee effectively priced in one cut and removed the second. Markets read the same: the September cut probability is 41 percent, down from 56 percent a month ago, and the terminal rate implied by OIS is 3.78 percent, up 22 basis points since the May CPI print.

Wages Are the Tiebreaker

May average hourly earnings came in at 3.6 percent year over year, the slowest since June 2021. The Sahm rule indicator is at 0.35, within 20 basis points of the 0.50 trigger. A non-farm payroll print below 150,000 in June would push the indicator past the line. That is the asymmetric risk: the Fed has the hawks in the room willing to hold, but it does not have the data to justify a cut before September, and it cannot afford to be late if the labor market rolls over. Warsh, on Wednesday, gets the first word, and the minutes, published Wednesday, are the only data point that matters until the July payrolls.

The Curve Is the Trade

The 2s10s spread is at 22 basis points, the flattest since March 2023. The 30-year auction cleared at 4.84 percent last week, the weakest tail of the year. Long duration is being repriced for terminal inflation around 2.5 percent, not 2.0 percent, and the long end is now the trade. The front end is range-bound until the June payrolls print on July 3, and the ECI report on July 31 is the swing factor for the September cut decision. Watch the data. Watch the curve. The macro story has not finished writing itself.

What to Watch This Week

JOLTS on Tuesday. Warsh press conference Wednesday. UMich inflation expectations on Friday. The Fed minutes Wednesday are the only data point that matters until the July payrolls. Until then, the front end is range-bound, the long end is the trade, and the Fed is the only story that matters.