The June 17 to 18 FOMC delivers the rate decision (no cut), the Summary of Economic Projections, and the updated dot plot four sessions from Monday’s open. Fed-funds futures closed Friday with September 17 cut probability at 88%, second 2026 cut at 41%, 10-year yield at 4.09%, and 2s10s spread at 49 basis points. The curve is now pricing 1.9 cuts in 2026, up from the 1.5 in the March SEP. The dot plot has to close the gap one way or the other. The CPI, PPI, and Michigan prints from the last seven days did their work. The Committee’s projections are the next variable.

Where the dots sit going in

The March 2026 SEP showed:

  • 2026 fed funds median: 4.625% (range 4.375 to 5.125)
  • 2027 fed funds median: 3.875% (range 3.375 to 4.625)
  • Long-run fed funds median: 3.000% (range 2.500 to 3.750)
  • 2026 core PCE projection: 2.7% (range 2.5 to 3.0)
  • 2026 unemployment projection: 4.4% (range 4.2 to 4.7)
  • 2026 GDP projection: 1.6% (range 1.2 to 2.0)

With funds at 5.125% to 5.375%, a 2026 median of 4.625% implies two 25 basis point cuts, but the March mean was 4.71%, two ticks above the median. That mean is what produced the 1.5 cuts read the curve has been working against for three months. Moving the median to 4.375% (the next 25 basis point step lower) prints 2 cuts as the explicit base case.

The three SEP configurations that move the market

Configuration one: 2026 median at 4.375%, dispersion narrows. This is the path that ratifies the 88% September pricing. The 2026 unemployment projection moves from 4.4% to 4.5% to track the May payrolls revisions and the continuing claims at 1.84 million. Core PCE projection moves from 2.7% to 2.6% to track the two-month CPI core trend at 0.21% annualized to 2.5%. The 10-year prices through 4.00%, the dollar prints to a new 2026 low, and second 2026 cut probability moves from 41% to 58%. The Powell press conference at 2:30 ET would need to confirm two-sided risks without leaning hawkish.

Configuration two: 2026 median holds at 4.625%, dispersion narrows. The least-priced outcome and the most plausible compromise. The median stays at 4.625%, but the standard deviation of the nineteen dots compresses from 0.31 to roughly 0.22, with fewer projections at the 5.125% upper bound and fewer at the 4.375% lower bound. The signal is “we still see one cut as the baseline, but the tail risks have come in.” Curve repricing is asymmetric. 2s10s flattens through 45 basis points, the 10-year trades to 4.05%, and September cut probability holds near 78%. The dollar stays bid. Powell would frame this as “data-dependent with a higher bar for upside surprises.”

Configuration three: 2026 median moves to 4.875%. A 25 basis point hawkish move and the configuration with the largest downside for risk assets. This requires four or more participants moving from the 4.375% to 4.625% range up to 4.875% or 5.125%. Triggers would be a 2026 core PCE projection at 2.8%, an unemployment projection holding at 4.4%, and a GDP projection at 1.8%. September cut probability would reset toward 45%, the 10-year would trade to 4.25%, and the dollar index would print through 104. The qualitative case requires Powell to point at the Michigan five-to-ten-year at 4.2% and the NY Fed SCE three-year at 2.7% as evidence that expectations have stopped anchoring.

What lands before the dots

Monday is quiet. The Empire State Manufacturing Survey for June releases at 8:30 ET. The May headline at minus 8.4 sat below the breakeven for the eleventh consecutive month, with the prices-paid index at 52.7 and the prices-received index at 34.1. A spread above 18 in the prices spread is the indicator that margin compression is still pricing through.

Tuesday brings May Advance Retail Sales at 8:30 ET. April headline at minus 0.2% with the control group at plus 0.1% was the softest two-line print since January. Consensus for May headline sits near plus 0.1% with the control group at plus 0.2%. The control group is the line that feeds Q2 GDP directly. A control-group print at 0.0% or below would line up with the continuing claims trend and would harden the 2 cuts read at the median. NY Fed SCE for May also releases Tuesday at 11:00 ET. The one-year inflation expectation has held at 3.1% for three months. The three-year sits at 2.7%. The five-year sits at 2.8%. Movement in any of the three is the late signal before blackout exits.

Wednesday is the meeting. The statement releases at 2:00 ET with the SEP. The dot plot is on page 4 of the SEP. The press conference opens at 2:30 ET. The four questions to watch from the floor: (1) what conditions move the Committee from “patient” to “data is sufficient,” (2) whether the labor market is “balanced” or “softening,” (3) whether the inflation expectations evidence is “anchored” or “well-anchored,” and (4) whether the Committee is “prepared to act” in September or “prepared to consider” acting. Each adjective shift moves between five and twelve basis points on the 2-year yield.

Thursday and Friday are post-meeting digestion. Weekly jobless claims at 8:30 ET Thursday and the Philadelphia Fed Manufacturing Survey at 8:30 ET round out the calendar. Friday is quadruple witching and the Conference Board Leading Economic Index for May at 10:00 ET. The LEI has printed 38 consecutive negative months, the longest run since the series began in 1959.

The June 27 PCE estimate

The May personal income and outlays release prints June 27 at 8:30 ET. The estimate from the CPI and PPI prints sits at 0.17% core, three basis points under the line that anchored the March SEP. The headline estimate sits at 0.13%, with the PCE deflator gap to CPI running at roughly 0.3 percentage points year-over-year. A PCE print at or below 0.17% core with the SEP carrying a 2.6% 2026 projection would close the loop on the disinflation read. A print at 0.22% or above would reopen the question the dot plot tried to settle nine days earlier.

Where Friday closed

Fed-funds futures closed Friday with September 17 cut at 88%, November 5 second cut at 41%, 2026 cuts implied at 1.9, 2027 cuts implied at 3.0, 2-year yield at 3.66%, 10-year at 4.09%, 30-year at 4.42%, 2s10s at 49 basis points, and Dollar Index at 102.8. The dot plot is the only release this week that can move all eight numbers at once.