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Fed Holds Split Meeting, Drops Guidance, Forms Review Group

7/29/2026

42 10 Full Breakdown

Summary

Story summary

The Fed’s FOMC met on July 28-29, 2026, chaired by Chair Kevin Warsh amid a split committee and pressure from President Donald Trump, leaving a rate hike uncertain.
CME FedWatch gave 68.5% chance rates stay unchanged and a 31.5% chance of 0.25-point increase.
Warsh announced Fed would drop forward guidance, would not issue a dot-plot forecast, and created group chaired by Bank of England governor Mervyn King to review communications.

History

Historical Context

In the late 1970s, soaring U.S. inflation (13.5% in 1980) prompted Fed Chairman Paul Volcker to raise the federal-funds rate to roughly 20% by June 1981, a tight-money stance that restored price stability. The July 2026 decision by Fed Chair Kevin Warsh to drop forward guidance and enlist Bank of England Governor Mervyn King mirrors Volcker’s use of clear, forceful communication to shape market expectations.

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Story summary

The Fed’s FOMC met on July 28-29, 2026, chaired by Chair Kevin Warsh amid a split committee and pressure from President Donald Trump, leaving a rate hike uncertain.
CME FedWatch gave 68.5% chance rates stay unchanged and a 31.5% chance of 0.25-point increase.
Warsh announced Fed would drop forward guidance, would not issue a dot-plot forecast, and created group chaired by Bank of England governor Mervyn King to review communications.

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