Fed's July Split Sets Stage for September Rate Hike Showdown
The Federal Reserve's July meeting ended in a 9-3 split on interest rates, leaving the fate of future hikes uncertain.
With the next FOMC meeting set for September 15-16 and a critical CPI print expected around August 12, market participants are bracing for impact.
June's Consumer Price Index offered a mixed bag, with month-over-month inflation falling 0.4%, but year-over-year inflation still clocking in at 3.5% - above the Fed's 2% target.
Energy prices have been the main driver of the headline improvement, but ongoing tensions in the Middle East and supply chain disruptions pose a persistent threat to disinflation.
A Goldman Sachs projection suggests potential easing later in 2026, targeting a terminal rate around 3%-3.25% as external inflationary pressures fade.