Fed expected to keep rates steady at July meeting amid rising oil prices
The Federal Reserve is likely to leave its benchmark rate unchanged at the July 29 meeting, though higher oil prices have increased market expectations of a possible hike later in the year.
The Federal Open Market Committee is set to announce its interest-rate decision on Wednesday, July 29, at 2 p.m. ET, with Chair Kevin Warsh slated to hold a press conference at 2:30 p.m. ET. Market data from CME Group’s FedWatch tool shows a 38% probability of a rate increase at the meeting, up from 12% a week earlier, but most forecasts still point to a hold in the 3.5%-3.75% target range, marking the fifth consecutive meeting without a change.
Rising oil prices, which have recently topped $100 a barrel, have revived concerns that inflation could remain persistent. Nigel Green, chief executive of the deVere Group, said in an email that “the Fed will find holding steady a harder case to make than it looked even a few weeks ago.”
Economists surveyed by FactSet expect the Fed to maintain the current rate, while a minority of policymakers indicated support for a later hike. Gregory Daco, chief economist for EY-Parthenon, noted that a September meeting could test whether recent inflation improvements are durable, adding that “our base case remains that the Fed will stay on hold through the rest of the year, but it’s a 60–40 call.”
Warsh has offered little forward guidance, declining to release individual economic projections at the June meeting, which leaves analysts relying on market signals and expert commentary to gauge future policy moves.