Fed Seen Holding Rates at 3.5%-3.75% as Warsh Keeps July Move Unclear
Updated
Updated · USA TODAY · Jul 24
Fed Seen Holding Rates at 3.5%-3.75% as Warsh Keeps July Move Unclear
3 articles · Updated · USA TODAY · Jul 24
Summary
Most forecasters expect the Fed to leave its benchmark rate at 3.5%-3.75% on July 29, even as Kevin Warsh’s refusal to give forward guidance leaves the outcome unusually hard to call.
June data muddied the picture: headline inflation slowed to 3.5% from 4.2% in May, core inflation also eased, and hiring weakened after earlier gains, reducing the immediate case for a hike.
Fed officials are still split because inflation has run above the 2% target for five years and could reaccelerate from tariffs, AI-driven demand and renewed U.S.-Iran fighting; June projections showed 9 members leaning toward hikes before end-2026, 8 toward no change and 1 toward a cut.
Reuters’ median economist forecast still sees rates unchanged for the rest of 2026, but many now rate the chance of a hike next year as high, underscoring how Warsh’s new leadership has made the policy path less predictable.