Fed expected to hold rates, September hike possible
Analysis based on 7 articles · First reported Jul 28, 2026 · Last updated Jul 29, 2026
The Fed's expected inaction this week maintains current monetary conditions, but the rising probability of a September hike could strengthen the dollar and weigh on equities. Persistent inflation and geopolitical risks from the Iran war keep energy prices elevated, impacting consumer spending and corporate margins.
The United States — Federal Reserve is expected to keep its benchmark interest rate unchanged at its July 28-29 meeting, but policymakers are increasingly frustrated with inflation remaining above the 2% target for over five years. New Fed Chair Kevin Warsh has stated he has 'no tolerance' for elevated inflation. Market expectations for a September rate hike have risen to 76% according to CME FedWatch, up from 59% a month ago. The Iran war and Houthi attacks on Red Sea shipping add uncertainty to the inflation outlook, as oil prices have spiked. Other inflationary pressures include tariffs imposed by President Donald Trump and investment in AI data centers. Core inflation cooled in June, but several Fed officials argue that rate hikes are necessary to return inflation to target.
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