US Economic Weekly

Research evidence excerpt

US Economic Weekly

Global Markets Research

31 July 2026US Economic Weekly

Economics - North America

Research Analysts

Markets play the ball North America Economics

Aichi Amemiya - NSI

• The FOMCheldratessteady, in line with our expectation. Chair Warsh’s continued aichi.amemiya@nomura.com

dovishness, coupled with a muddled explanation of the Fed’s reaction function raised +1 212 667 9347

concerns around the Fed’s inflation credibility. Paradoxically, Warsh's excessive Jeremy Schwartz - NSI

dovishness likely raises the risk of a hike if inflation data reaccelerate. jeremy.schwartz@nomura.com

+1 212 667 9637

• We expect headline NFP accelerated to 130k in July from 57k in June. The

Ruchir Sharma - NSI unemployment rate likely remained sideways at 4.2%, while average hourly earnings

ruchir.sharma@nomura.com

(AHE) growth slowed to 0.2% m-o-m. Overall, a resilient labor market is likely to keep +1 212 667 9186

the Fed focused on inflation risks.

• Inflation data released this week supported the Fed’s wait-and-see approach. Core

PCE inflation slowed sharply to 0.132% m-o-m in June. Despite an upside surprise in

headline Q2 ECI, the continued moderation in private services ECI was encouraging

and point to limited risk of a renewed pickup in services inflation.

FOMC holds steady, but Kashkari’s dissent surprises

The FOMCkeptratesonhold at its July meeting, in line with our expectation. The

meeting statement was essentially unchanged. There were three dissents in favor of a

hike, from presidents Logan, Hammack, and Kashkari. While we had expected dissents

from Logan and Hammack, Kashkari’s was a surprise. Kashkari’s post-meeting statement

suggested he is increasingly concerned that a series of supply shocks could entrench

elevated inflation.

No clarity on inflation framework