United States

Research evidence excerpt

United States

Michael Feroli (1-212) 834-5523 Abiel Reinhart (1-617) 712 9122 North America Economic Research J P M O R G A Nmichael.e.feroli@jpmorgan.com abiel.reinhart@jpmchase.com

JPMorgan Chase Bank NA JPMorgan Chase Bank NA 31 July 2026

Michael S Hanson (1-212) 622-8603 Bennett Parrish (1-212) 622-9003

michael.s.hanson@jpmchase.com bennett.parrish@jpmchase.com

JPMorgan Chase Bank NA JPMorgan Chase Bank NA

United States The FOMC and its discontents

As noted, this week’s FOMC decision to keep policy

• Chair Warsh’s ineffective defense of Fed credibility unchanged was accompanied by three dissents, which is an

may compel the FOMC to hike by year-end

uncommonly large number. All three are regional bank presi-

• We see a move in December, but hot inflation readings dents (Hammack, Kashkari, and Logan), and all three wanted

could result in a hike as early as September to raise rates by 25bp this week. Each published a statement

• Conversely, softer numbers combined with June’s low explaining their reasons for dissenting, and each contained a

inflation reading could delay any action number of shared themes: a growing impatience with five-

plus years of above-target inflation and worries that it could

• We expect payrolls to rise 75k next week, with a tem- become embedded; an assessment that even after accounting

porary rise in the unemployment rate to 4.3% for recent shocks, inflation would remain elevated; a belief

that the economy is at full employment, so inflation is theThe main event of this week was the the FOMC meeting. The

more pressing concern; and a worry that avoiding smallCommittee left rates on hold, as expected, with three hawkish

moves now would necessitate more aggressive moves later.dissents. However, the big news came in the post-meeting