Warsh Expected to Hold Rates as Feds Keep Hike Odds at 38%

The Federal Reserve's decision on July 29, 2026, has sparked a divide between economic forecasts and financial-market pricing. All 104 economists surveyed by Reuters expected the Federal Open Market Committee to keep the federal funds target range unchanged at 3.50% -- 3.75%, yet fed funds futures assigned approximately a 38% probability of a 25-basis-point increase.

The contrast between forecasts and market pricing does not mean that markets collectively expect a hike; rather, it reflects the substantial value assigned to the risk of a surprise as investors assess persistent inflation, volatile oil prices, and a divided outlook within the Fed.

Fed Chairman Kevin Warsh is expected to support a rate hold at the July 2026 FOMC meeting. The strongest evidence supporting a July 2026 Fed rate hold is the breadth of the economist consensus and the committee's most recent decision.