Wall Street can't agree on what the Fed will do on July 29

Ahead of the Fed's July 29 meeting, economists are more divided than usual. The committee, now led by new Fed Chair Kevin Warsh, has to decide whether to raise rates from the current 3.5%-3.75% range — and this time the market is far from unanimous: CME data puts the odds of a hold at 66.3% and the odds of a 25-basis-point hike at 33.7%.

• Inside the Fed itself, the split is almost as even: 9 of 19 committee members project at least one rate hike before the end of 2026, and six project two.
• A Reuters poll of 104 economists found most still expect a hold in July, but most respondents now describe the odds of a 2026 hike as "high" — a reversal from "low" just a month earlier.
• Annual inflation eased to 3.5% in June, weakening the case for an immediate hike — but rising oil prices from Middle East tensions could make that dip temporary.

We have no tolerance for high inflation — we're committed to bringing it back to our 2% target.

Neil Dutta of Renaissance Macro argues Warsh will be "forced" into a surprise hike, citing strong AI-infrastructure demand, rising oil prices, and unchanged tariff policy. Analysts Luke Kawa, Ritesh Jain, and Mike Zaccardi share that view. James Knightley of ING, by contrast, expects a hold, arguing that weak June inflation and a softening labor market leave the Fed no reason to rush. Jeremy Schwartz of Nomura holds a similar position.

That split isn't just between hawks and doves — it also shows up within the Reuters poll itself, where the sharp one-month swing in sentiment stands out more than the disagreement itself. We've already covered the market odds for this same meeting through prediction markets — where Polymarket and Kalshi priced a hold above 85%, noticeably higher than the CME consensus. The gap between the two venues is itself a sign that nobody is all that confident about the outcome.

*This article is for informational purposes only and does not constitute investment advice.*