The Federal Reserve is expected to announce today that it is holding interest rates steady, maintaining its benchmark federal funds rate in a range of 3.5% to 3.75% as markets brace for the central bank’s latest monetary policy decision.
The Fed will announce its decision at 2 p.m. ET, with Fed Chair Kevin Warsh set to hold a press conference at 2:30 p.m. ET. According to the CME Group’s FedWatch tool, bond traders have placed 68.5% odds on a hold and 31.5% odds on a quarter-point hike, according to Yahoo Finance reporting on July 28.
If the Fed holds as expected, it would mark the fifth consecutive meeting where the central bank has kept rates unchanged. Economists polled by FactSet predict the hold, according to CBS News reporting on July 24.
The Fed has maintained rates at 3.5% to 3.75% since December 2025, when it made its last adjustment. At the June meeting, the Federal Open Market Committee voted unanimously 12-0 to hold rates, according to Fox Business.
The decision comes amid conflicting pressures. Inflation has cooled somewhat, with the Fed’s preferred measure showing headline inflation at 3.37% and core inflation at 2.52% as of July 28, according to Cleveland Federal Reserve inflation nowcasting data. However, geopolitical uncertainty from the Iran war continues to cloud the outlook. Reuters reported on July 21 that the Federal Reserve will keep its key interest rate steady for the rest of 2026 to tackle a five-year-long inflation problem, with analysts citing how the Iran conflict drives up energy prices and complicates inflation forecasts.
Uncertainty has increased in recent days. Fed expected to hold rates steady today amid Iran war inflation pressure, and futures markets have shifted: on July 17, only 13% of traders expected a hike, but by July 27, that probability had risen to 37%, according to Yahoo Finance. This reflects growing concern that any future escalation in the Middle East conflict could reignite inflation pressures. CBS News reported on July 24 that if inflation were to reignite amid escalations in the U.S.-Iran war, it could raise the probability of a rate hike later in 2026.
Despite the hold, markets and analysts do not expect rate cuts anytime soon. J.P. Morgan Global Research expects the Fed to remain on hold for the rest of 2026 before potentially hiking 25 basis points in September 2027. Mortgage rates fall to 6.61% as Fed prepares for July 29 decision, reflecting how Fed expectations ripple through the broader economy. The decision will also shape near-term moves in stocks and bonds; stock market awaits Fed decision as chip selloff deepens as investors position for the announcement.
Sources
- CBS News — FactSet economist polling and analysis of inflation risks from Iran war
- Yahoo Finance — CME FedWatch tool odds and market pricing for hold vs. hike
- Fox Business — June 2026 FOMC decision details and 12-0 unanimous vote
- Reuters — Fed policy outlook for rest of 2026 and inflation management
- Cleveland Federal Reserve — July 2026 inflation nowcasting data
- J.P. Morgan Global Research — 2026-2027 rate path expectations
