That‘s incredible!

Research evidence excerpt

That‘s incredible!

J P M O R G A N North America Economic Research

29 July 2026

That’s incredible!

The FOMC voted 9-3 to leave rates on hold, an outcome close to expectations. The Economic and Policy Research

statement was almost unchanged relative to the June meeting. In Warsh’s press Michael Feroli

conference, he once again failed to specify how he intended to achieve his (1-212) 834-5523

stridently asserted inflation resolve. He also cast doubt on whether PCE inflation michael.e.feroli@jpmorgan.com

will remain the Fed’s inflation target in the medium run. Both of these points raise JPMorgan Chase Bank NA

questions about the new chair’s credibility in delivering lower inflation. We

believe this will add some urgency for the rest of the committee to act on its

mandate. We are pulling forward our next rate hike from 2H27 to December

this year, with policy rates on hold at 3.75-4.0% thereafter. September is clearly

a risk if inflation heats up again soon. We wouldn’t characterize this revision as the

market “pressuring” the Fed, but rather another challenge prompting the Fed to act

to maintain its credibility.

The 2pm developments were smooth sailing. The decision to leave rates on hold

was in line with expectations. There were three hawkish dissents: Hammack,

Kashkari, and Logan. Kashkari was a modest surprise, but we are reading very little

policy significance into his dissent. The statement was effectively unchanged. This

was somewhat unexpected for two reasons. First, the last statement was a complete

rewrite relative to the previous statement. Warsh noted that it dispensed with older

language, though today’s statement suggests fresh rewrites aren’t to be expected

after each meeting. Second, the last statement merely ended with “The Committee