Overview
- The Federal Open Market Committee voted to keep the policy rate at 3.50%–3.75% in its July meeting on July 29, with no change to the fed funds target.
- Chair Kevin Warsh repeated the Fed’s commitment to bring inflation back to 2% while deliberately cutting back routine forward guidance and declining to provide a personal policy outlook.
- The July vote split 9–3, with three officials formally dissenting in favor of a 25 basis-point hike, signaling meaningful internal disagreement over near-term action.
- Markets moved sharply after the meeting as long-term Treasury yields rose and U.S. stocks plunged, and investors have raised the odds that the Fed will tighten policy by the September meeting.
- Inflation remains well above target and is being driven by higher energy prices and strong business investment, so the Fed is now focused on incoming inflation and jobs data, task-force reports, and the September dot plot as the next key signals for policy.