Overview
- The Federal Open Market Committee is meeting July 28–29 and most economists expect the Fed to keep the federal funds rate at 3.50%–3.75% while releasing a policy statement and hosting a press conference.
- Markets place roughly a 30 to 40 percent chance of an immediate 25 basis‑point hike so traders will parse the post‑decision press conference for clues about the Fed’s next steps.
- Recent data complicate the call because June headline consumer prices fell to about 3.5% year‑over‑year and payroll gains slowed to roughly 57,000, leaving core inflation above the Fed’s 2 percent goal but showing some cooling.
- Renewed Iran‑related attacks and higher oil prices have pushed long‑term yields and fuel costs up, creating near‑term inflation risk that increases pressure on policymakers to consider rate action.
- Warsh has ended routine forward guidance and created external task forces to redesign Fed communication and framework which means his verbal guidance at this meeting will shape how markets price September and beyond.