FOMC Decision: Hawkish Rhetoric, No Action: September Hike Odds Decline
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The Federal Reserve left policy rates unchanged at the July 28–29 FOMC meeting. While Chair Warsh maintained a hawkish tone, the decision and accompanying communications modestly reduced the probability of a September rate hike, in our view.
Trusted Insights for What’s Ahead®
The Federal Reserve left policy rates unchanged at the July 28–29 FOMC meeting. While Chair Warsh maintained a hawkish tone, the decision and accompanying communications modestly reduced the probability of a September rate hike, in our view.
The Conference Board continues to expect the Fed to remain on hold through the end of 2027. Moderating inflation and gradually cooling labor market conditions continue to support a patient policy stance.
The three dissents from regional Fed presidents were widely anticipated given their recent public remarks. The absence of dissent among Board governors suggests the Committee's core leadership remains broadly aligned despite increasingly visible policy differences.
The proximity of the midterm elections further raises the bar for policy action. Unless incoming data show a meaningful reacceleration in inflation or economic activity, the Fed is likely to avoid changing policy in the months immediately preceding the election.
Chair Warsh reiterated the Fed's unwavering commitment to the 2% inflation target, but his comments also suggest he may be buying time while the five policy task forces complete their review of th
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