Economy

The Federal Reserve voted 9–3 on July 29, 2026, to keep the federal funds rate unchanged, with Cleveland, Minneapolis, and Dallas regional presidents each calling for an immediate 25-basis-point increase — a shift from earlier dissents that favored cuts. Chair Kevin Warsh again declined to issue forward guidance, describing the omission as deliberate policy to let market prices reflect incoming data without interference. Markets responded sharply: the S&P 500 fell 1.52%, the 30-year Treasury yield rose 12 basis points to 5.21%, and CME data showed traders pricing roughly a 55% probability of a hike at the September meeting.

The Bureau of Economic Analysis published its first reading of Q2 2026 GDP growth on July 30, following a Q1 final estimate of 2.1% annualized growth. Major nowcasting models ranged from 1.5% to 2.8% for Q2, a spread that reflects genuine uncertainty driven by incomplete trade and inventory data at the advance stage. The release arrives one day after a 9-3 FOMC vote to hold rates at 3.50%–3.75%, making the GDP figure and its accompanying PCE inflation data directly relevant to Federal Reserve deliberations ahead of the September policy meeting.

The Bank of Japan is universally expected to keep its overnight call rate at 1.00% on July 31, following its June hike to a 31-year high. The substantive information will come from the quarterly Outlook Report, which Reuters reporting suggests will revise growth modestly upward and inflation modestly downward, and from Governor Ueda's press conference, where economists are roughly split on whether the next hike arrives in October or December. A yen near a four-decade low above ¥163 per dollar and crude oil in the high $70s per barrel remain the key external variables shaping both the forecast revisions and the policy timeline.