July FOMC Preview: Policy Watch

Research evidence excerpt

July FOMC Preview: Policy Watch

Nomura | Policy Watch 23 July 2026

information around the Fed’s reaction function.

If there is no rate hike as we expect, a key thing to monitor would be the number of

hawkish dissents. We expect two dissents from regional Fed presidents, with risk skewed

toward an additional third dissent. Chair Warsh’s press conference will likely highlight the

importance of price stability, but we expect hints of dovishness in his comments, similar to

his recent public appearances.

Recent Fed speak supports a wait-and-see approach

Recent comments from policymakers suggest most officials are comfortable holding rates

steady at the July FOMC meeting.

At his firstsemi-annualtestimony at Congress, Warsh did not provide any indication for

the near-term policy outlook but signaled his dovish bias. He reiterated that AI should be

disinflationary over the medium term and argued that AI-related capex would generate

only a one-time price shock. Separately, his skepticism about the current official inflation

measures suggest little urgency to act in the near term.

Other policymakers, such as NY Fed President Williams, Governor Cook, and Vice Chair

Jefferson, appeared comfortable with a wait-and-see approach. Speaking before the June

CPI report, Governor Waller seemed to be cautious about inflation risks and mentioned

that policy decisions should be based on incoming inflation data. We think the June CPI

and PPI reports are likely to convince him to remain on hold at the July meeting. Most

centrist officials appear comfortable remaining on hold, as they expect sequential

disinflation going ahead.

By contrast, a faction of the Committee remained hawkish. Dallas Fed President Logan

argued that AI-related demand is “already here” and adding to inflationary pressure.