Updated
Updated · Forbes · Jul 23
Markets Price 33% Odds of Fed July Rate Hike as Inflation Stays 1.7 Points Above Target
Updated
Updated · Forbes · Jul 23

Markets Price 33% Odds of Fed July Rate Hike as Inflation Stays 1.7 Points Above Target

3 articles · Updated · Forbes · Jul 23

Summary

  • Fixed-income markets now see about a one-third chance the Federal Reserve will raise rates at its July 28-29 meeting, with traders still leaning toward two hikes in 2026.
  • 3.7% inflation through June — 1.7 percentage points above the Fed’s 2% target — and rising July energy prices have kept pressure on policymakers to tighten.
  • July speeches from Lisa Cook, Philip Jefferson and Christopher Waller all signaled that if inflation does not cool soon, the current policy stance may need to be reconsidered.
  • The June meeting left the federal funds target range at 3.5% to 3.75%, and markets still see September or October as possible alternatives if officials wait for more data.

Insights

If inflation stays near 3.7%, what exact data could push the Fed from warning about hikes to actually raising rates?
Could rising oil prices force the Fed to hike sooner than markets expect, even though July still looks like a hold?
Is the bigger risk now persistent energy-driven inflation, or the Fed tightening too much in response to temporary supply shocks?