Overview
- The Federal Open Market Committee voted 9‑3 last week to keep the federal funds rate at 3.50%–3.75%, with Minneapolis, Cleveland and Dallas Fed presidents dissenting in favor of a 25 basis‑point hike.
- Since the July meeting several influential officials, including Neel Kashkari and Lisa Cook, have said they are prepared to raise rates gradually if disinflation fails to resume.
- Inflation remains well above the Fed’s 2% goal with June readings showing core PCE at about 3.3% and headline PCE near 3.7%, a key reason officials cited for concern.
- Markets and prediction tools have re‑priced the outlook, with September hike odds in the mid‑40s percent on some venues and long‑term Treasury yields rising after the July hold.
- The coming July CPI and PCE reports and the Sept. 15–16 FOMC meeting will be decisive for policy and could push borrowing costs higher for households and businesses if the Fed tightens.