Fed Meeting in Focus: Hold Expected but Hike Odds Creep Higher on Oil Spike

The Federal Open Market Committee gathers on July 28-29, with its interest-rate decision due Wednesday afternoon followed by a press conference led by Chair Kevin Warsh. Economists polled by FactSet widely expect the central bank to leave its benchmark rate unchanged at 3.50% to 3.75%, which would mark the fifth consecutive hold. No fresh economic projections are scheduled for this meeting, and Warsh has signalled he intends to offer less forward guidance than his predecessor, leaving investors with fewer clues about the path ahead. The bigger story is the shifting balance of risks. Resurgent inflation linked to higher energy prices, with oil topping $100 a barrel in recent weeks amid the US-Iran conflict, has pushed some forecasters to price in a possible rate increase before year-end rather than a cut. Prediction markets and futures moved to reflect a rising, though still minority, chance of a hike, and roughly half of policymakers indicated in June they could support one later this year. Analysts say September may be the first real test of whether inflation is easing enough to keep policy on hold.