Bar to Fed rate hike this week remains high amid market speculation

The Federal Reserve wraps up its two-day FOMC meeting on July 29, and the overwhelming consensus is that Chair Kevin Warsh and company will keep the federal funds rate exactly where it is. The current target range of 3.50%-3.75% has held since early 2026, and economists are placing somewhere between 60% and 90% odds on a hold. Why a hike was even on the table For a stretch in mid-July, the probability of a rate hike climbed as high as roughly 46.5% on the CME FedWatch Tool. The culprit was oil prices, which had been pushing upward and threatening to reignite the inflation narrative that the Fed spent the better part of two years trying to extinguish. Then June’s Consumer Price Index landed. Core inflation came in at 2.6% year-over-year, a number soft enough to give the doves on the committee some breathing room. In English: prices are still rising faster than the Fed’s 2% target, but not fast enough to justify an emergency policy reversal. The Fed just finished a cutting cycle in late 2025, and now we’re already talking about potential hikes later in 2026. The Warsh factor and internal divisions Kevin Warsh took over as Fed Chair in a period that could generously be described as “c...