Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMary Helen GillespieSun, July 26, 2026 at 9:13 PM GMT+2 6 min readThe Federal Reserve's July 28-29 policymaking meeting on interest rates was, frankly, expected to be a snooze fest just a few weeks ago. Now, it's going to be a humdinger.Economists, traders, and other Fed watchers were forecasting that the Federal Open Market Committee would vote to hold the benchmark Federal Funds Rate steady. This was due to a stabilizing labor market, a huge slide in oil prices, and a refreshing dip in the June Consumer Price Index, indicating a resilient U.S. economy that could take a beat from hawkish concerns that a tightening of policy was needed ASAP.Today, we're looking at a coin toss, folks. Don't be surprised if there's a rate hike coming down the pike."I can make a good case for either raising rates or not," William English, a former senior Fed economist now at Yale University, told The Wall Street Journal. "They're just kind of stuck."The recent Iran war military escalation saw energy prices surge once again, along with concerns that the so-called peace accord between the United States and Iran had broken down. Prices rose at gas pumps across the country, while Treasury yields hit new highs.And the Trump administration on July 24 released new tariffs of between 10% and 12.5% against 60 countries for alleged forced labor practices — a workaround from the Supreme Court ruling earlier this year squashing the "Liberation Day" tariffs.As Eric Diton, president of The Wealth Alliance, told TheStreet in an email: "Given that the Iran War continues to drag on, and oil prices have spiked once again, combined with a resilient labor market and a shortage of resources due to the AI buildout, plus the tariff uncertainty, the Fed target of 2% inflation seems unattainable in the near-term. "The 30-year Treasury rate sits around 5.18%, the highest in nearly two decades. The markets now give a 30-40% probability that the Fed will need to hike rates at least once before year-end. I agree that the Fed may have to hike rates given this unusual set of circumstances.""While monthly price fluctuations are inevitable — especially in an unsettled world — underlying inflation over longer time horizons is determined largely by monetary policy,'' Fed Chairman Kevin Warsh said in prepared remarks while delivering the Fed's twice-yearly Monetary Policy Report to Congress July 14-15.The report, issued July 10, said the outlook of the future path of interest rates "is subject to considerable uncertainty." It also described the U.S. economy as overall "expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East.'' Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info