Fed Chair Kevin Warsh will lead his second interest rate decision — and it's a close call.Tom Williams/CQ-Roll Call, Inc via Getty Images
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Updated 2026-07-29T18:56:55.504Z
Fed meeting updates: The FOMC holds rates steady for the fifth time this year, but dissent is growing
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The Fed held interest rates steady for the fifth meeting in a row, but three voting members are ready to hike.
Kevin Warsh has already left his mark on the central bank. The new chair of the Federal Reserve took the helm this summer and has since announced plans to overhaul the central bank's approach to economic data and communications.
Business Insider is following the news all day — with market moves, insights from economists, and analysis on what it all means for consumers. Follow along for updates.
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2026-07-29T18:56:32.000Z
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Warsh's biggest speech of the year is coming up next month
The Fed chair sees his first Jackson Hole Economic Symposium as "a blank page," and hasn't written it yet. He plans to "frame the big questions," rather than dig into the smaller data details or policy moves.
"What's really happening with productivity? What's really happening in demographics? What's really happening to the global economy amid the shocks?" One thing is clear: Warsh will consult his task forces.
2026-07-29T18:54:04.000Z
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Warsh argued today's hold wasn't a pause
Warsh wouldn't characterize the hold decision as a policy pause. Rather, it was a "rigorous review" of the economic situation and the Fed's monetary goals. "This is the beginning of the story, not the end of the story."
2026-07-29T18:52:15.000Z
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Warsh reaffirmed the 2% inflation target
If inflation remains elevated and isn't coming down, Warsh said that hiking rates isn't the only remedy. He said he is not ok with a higher inflation target, and is committed to delivering stable prices at 2%.
The Fed will be judged on how it performs, he said, and he takes responsibility for each step in monetary policy. In the weeks before the next call, Warsh said, "This is a period of watchful thinking, not watchful waiting."
2026-07-29T18:48:09.000Z
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Warsh is at peace with a hold
Warsh said market judgments on interest rates have moved up over the last 42 days, but the Fed is confident in its decision to hold rates steady. He and his colleagues are watching key data closely to determine their next move, but policy is not a preset course.
"Monetary policy matters not just by what we say, or even what we do, monetary policy matters by how it affects the real economy," he said.
2026-07-29T18:45:27.000Z
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Warsh acknowledged dissenters
Warsh said, "I asked for a good family fight, and I got one." The FOMC wasn't scared to have hard conversations about policy and priorities, he said, but "there was nothing inertial about that decision."
"The path to central bank heaven" requires delivering on price stability, Warsh said, and all members are on board with that. He said the cooler June CPI report had little impact on committee votes, and that the FOMC is relying more on trends than on a single datapoint.
2026-07-29T18:42:15.000Z
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Warsh's message for markets
Warsh said the FOMC tries not to interfere with markets, which is part of why he chose to pull back on forward guidance. He wants investors to make decisions based on real-time economic data, not long-term central bank predictions.
"At some level, we haven't done much in 42 days," he said. "The markets have done quite a bit."
2026-07-29T18:40:38.000Z
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The FOMC discussed several issues facing the economy
The most striking feature of the economy is the strong growth of business investment, Warsh said. He used bullish language when recapping changes in the manufacturing, business, and AI sectors, despite continued supply chain challenges.
As chair, Warsh has repeatedly said the Fed should operate and assess economic data more like a corporation, including by embracing AI.
The most striking feature of the economy is the strong growth of business investment, Warsh said. He used bullish language when recapping changes in the manufacturing, business, and AI sectors, despite continued supply chain challenges.
As chair, Warsh has repeatedly said the Fed should operate and assess economic data more like a corporation, including by embracing AI.
Still, conflict in the Middle East and other economic shocks are shaping moderate restrictive Fed policy. "We know how very much depends on us getting this right," he said.
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2026-07-29T18:36:50.000Z
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Warsh is already seeing changes in how markets react to the Fed
Warsh said that, while the decision was near-verbatim to last month, the FOMC has detailed discussions about how the economic landscape is changing, and how they can help bring inflation down to the Fed's 2% goal.
He added that he is already seeing changes at the Fed due to his policies as chair.
Warsh said that, while the decision was near-verbatim to last month, the FOMC has detailed discussions about how the economic landscape is changing, and how they can help bring inflation down to the Fed's 2% goal.
He added that he is already seeing changes at the Fed due to his policies as chair.
"Prices reacted in real-time to incoming information, and the reduction in forward guidance might have been a factor," he said. "Market participants are learning to play the ball, and not the referee."
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2026-07-29T18:33:07.000Z
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The central bank's monetary outlook
Stepping up to the microphone, Warsh said the FOMC's discussions were "collegial" and "constructive." The economy is showing "impressive resilience" with recent shocks, he added, but remains confident that the central bank can deliver price stability. "Uncertainty does not mean a lack of clarity," he said, emphasizing that he and his colleagues will continue to be tough on inflation.
Notably, he has also begun saying "good day" at the top of press conferences, a departure from Powell's "good afternoon."
2026-07-29T18:17:41.000Z
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July's decision is nearly verbatim from June's
Outside of specific dissents and the date, the two-page rate call announcement is nearly identical to last month's.
The only difference? In July, the FOMC said it is "continuing its policy of maintaining ample reserves in the banking system." When Warsh took the helm in June, the document said it "reaffirmed" the policy.
Outside of specific dissents and the date, the two-page rate call announcement is nearly identical to last month's.
The only difference? In July, the FOMC said it is "continuing its policy of maintaining ample reserves in the banking system." When Warsh took the helm in June, the document said it "reaffirmed" the policy.
Unlike Powell, Warsh said he prefers rate calls to include "just the facts," with little economic analysis.
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2026-07-29T18:10:38.000Z
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Warsh will soon take the podium
Warsh will begin the press conference at 2:30 p.m. in Washington, DC. He will explain the Fed's outlook for jobs and inflation, the FOMC's rationale for the hike, and expectations for future monetary policy. It's likely that reporters will also ask Warsh about his new task forces, and whether continued geopolitical shocks are a major source of inflationary concern.
We'll be breaking out the highlights of Warsh's commentary throughout the conference.
2026-07-29T18:07:04.000Z
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Some economic optimism
In its rate announcement, the FOMC said "economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East." Productivity growth and capital investment are strong, the group said, and job gains have kept pace with workforce patterns, although inflation remains above the Fed's 2% target rate.
It's not time for a hike just yet — even if Fed leaders have penciled in at least rate increase for the back half of 2026.
2026-07-29T18:03:14.000Z
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First split vote of the Warsh era
Three governors dissented to the July hold call. Beth M. Hammock, Neel Kashkari, and Lorie K. Logan preferred a quarter-point rate hike. It's the most dissenting votes in a Fed meeting since April.
2026-07-29T18:01:56.000Z
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FOMC holds rates steady
The Fed will keep its benchmark interest rate steady between 3.5 and 3.75%, in alignment with expectations. It's the fifth consecutive rate hold by the committee and the second under Warsh. The chair will soon begin a press conference to discuss.
2026-07-29T17:48:39.000Z
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What reporters are watching for
After the rate decision — which is likely to include bare bones facts rather than the robust analysis characteristic under Powell's leadership — Warsh will hold a press conference. He is likely to open with a birds-eye view of the economic situation and an update on the Fed's task forces.
Warsh will then take questions from journalists. We expect he will receive questions about the task forces' leadership, the continued impact of the Iran war on inflation, his updated policies on communication and economic data, and whether the Fed sees more rate hikes in the future.
2026-07-29T17:38:25.000Z
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How the Fed impacts consumers
A single rate decision won't have a major impact on consumers, but Fed patterns over time impact credit cards, mortgage rates, auto loans, savings accounts, and company hiring patterns. Higher rates could be good news for prices, but risk slowing down the opportunities for job seekers.
Consumers "are feeling the impacts of continuing inflation pressures, which contribute to a broad range of affordability challenges," economic analyst Mark Hamrick said. "In aggregate, wage growth has been running neck and neck with inflation. Many workers are getting raises, but those gains are being gobbled up by inflation, which helps explain to some degree why consumers express high levels of dissatisfaction."
2026-07-29T17:25:01.000Z
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What economists and analysts are saying
"While we know Chairman Kevin Warsh is not a fan of forward guidance — or showing his hand with respect to his opinion on the direction of rates — I think collectively, the written statement and news conference will be used to signal" what's coming next, said economic analyst Mark Hamrick.
There will be several data releases indicating how the job market and inflation evolved before the next rate decision in September.
"While we know Chairman Kevin Warsh is not a fan of forward guidance — or showing his hand with respect to his opinion on the direction of rates — I think collectively, the written statement and news conference will be used to signal" what's coming next, said economic analyst Mark Hamrick.
There will be several data releases indicating how the job market and inflation evolved before the next rate decision in September.
"Consumers and businesses are growing weary of affordability challenges and an unpredictable economy," said Elizabeth Renter, NerdWallet's senior economist. "Regardless of what happens to interest rates, they'll look to the Fed for confirmation that inflation won't be allowed to run wild. Fed Chair Warsh's subtler approach to central bank communications may jeopardize these expectations if he doesn't provide explicit reassurance."
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2026-07-29T17:08:18.000Z
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'A good family fight'
After months of split interest rate decisions, the Fed returned to its characteristic uniformity in June, with all FOMC members voting to hold. Warsh said the group had a "good family fight" about economic data, the dual mandate, and rate calls, but ultimately came to the same conclusion.
"I'm proud to report that members of the FOMC are unambiguous and unanimous," he said. "This committee will deliver price stability."
After months of split interest rate decisions, the Fed returned to its characteristic uniformity in June, with all FOMC members voting to hold. Warsh said the group had a "good family fight" about economic data, the dual mandate, and rate calls, but ultimately came to the same conclusion.
"I'm proud to report that members of the FOMC are unambiguous and unanimous," he said. "This committee will deliver price stability."
We'll soon find out if there are any dissents at today's meeting.
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2026-07-29T16:59:50.000Z
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Projections for the back half of 2026
In the June quarterly projections, the FOMC had an even split in their future outlook. Nine FOMC members anticipate a hold or modest cut this year, while nine project at least one hike.
Fed leaders also said they expect core inflation to slow and anticipate that the unemployment rate will hover around 4% over the next few years. The question is: Will the first rate hike of 2026 happen in July?
2026-07-29T16:49:24.000Z
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The Fed and AI
It's no secret that Warsh is bullish on AI, seeing the technology as a significant economic opportunity for the US. He's not worried about chatbots replacing workers in the long run.
"You may have heard me say before that AI is shorthand for American ingenuity," he said in June, adding that any job market disruptions will be short-lived. "The United States is a winner as we go down this and will ultimately be better off," he said. Warsh would like to incorporate more AI into the Fed's work.
2026-07-29T16:38:47.000Z
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Warsh's new communication style
Besides reevaluating data sources, Warsh plans to change how the Fed communicates its decisions and economic outlook. He plans to end the FOMC's policy of providing forward guidance because he said it doesn't feel right "at this moment in time." Warsh abstained from providing predictions in the June dot plot, a quarterly release that indicates where FOMC members think rates will end up over the coming years.
Last month's rate call also included notably less economic context than rate decisions under Powell. It's unclear what economic predictions the FOMC will make going forward, and critics worry this change will reduce the Fed's transparency. Warsh appointed a task force — including University of Washington business professor Peter R. Fisher and former president of Brazil's central bank Arimino Fraga — to suggest new ways the Fed can communicate policy.
2026-07-29T16:25:22.000Z
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Warsh's take on economic data
Warsh hopes to modernize how the Fed uses economic data, doing away with what he calls "old-fashioned survey methods." At the last meeting, he said that private companies operate on real-time information, not "echoes of history" like the monthly jobs reports. He hopes the central bank can do the same — and it's an example of Warsh bringing his Wall Street background to Washington.
The data task force's official job description says it will "improve the quality and timeliness of real economic signals that inform the Federal Reserve's policy judgments," but it's too early for policy recommendations.
2026-07-29T16:12:09.000Z
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Backdrop of Big Tech earnings
The July Fed meeting comes alongside news in the Big Tech sector. Microsoft, Meta, Amazon, and Apple are all set to release their second-quarter earnings this week. Mag Seven companies Tesla and Alphabet saw stock drops last week after their earnings releases. The Roundhill Magnificent Seven ETF is down 3% for the year.
While investors will no doubt take notice of both these earnings and Fed's rate call, Warsh said he doesn't want markets to blindly react to interest rate decisions.
"I think financial markets perform best when they react to incoming data," he said last month. "The more that markets are paying attention to what's happening in the real economy — what's good data, and what's less good data — the more financial markets can price what they believe is the most likely and what is the tail risk."
2026-07-29T15:51:49.000Z
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UBS doesn't see the data supporting a hike
UBS anticipates that Warsh and the FOMC will leave rates unchanged, as recent data shows inflation is cooling and that labor market and income growth don't point toward an overheating economy.
"We expect the US central bank to keep the target range of the fed funds rate steady at 3.50-3.75%," wrote UBS Americas CIO Ulrike Hoffmann-Burchardi."The latest inflation data showed consecutive declines in core goods prices, and core services prices fell for the first time since 2020. The labor market also showed no signs of overheating, with real labor income growth consistent with a continued slowdown in consumer spending growth."
2026-07-29T15:30:54.000Z
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Future of Fed independence
Recent legal challenges against both Fed governor Lisa Cook's property records and Powell's handling of construction at the bank's Washington, DC, buildings brought future Fed independence into question. The FOMC is historically apolitical, and these actions from the Trump administration worried lawmakers across the aisle.
As chair, Warsh said he is committed to keeping the Fed nonpartisan. "I do not believe that independence of monetary policy is threatened when elected officials state their views on rates," he said during his confirmation hearing. "Fed independence is up to the Fed. That has three implications: First, Congress is tasked with the mission to ensure price stability. Inflation is the Fed's choice. Second, Fed independence is at its peak in the conduct of monetary policy." Third, "the Fed must stay in its lane."
2026-07-29T15:13:04.000Z
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Warsh hasn't yet faced political challenges
Kevin Warsh at his Fed chair confirmation hearing.Andrew Harnik/Getty Images
Powell faced White House pressure throughout his final year as chair, with Trump frequently calling for lower rates and filing legal cases against Fed leaders. But Warsh has so far been in the clear.
Trump has not mentioned Warsh in any Truth Social posts since his nomination announcement. With a potential hike, the July meeting could test Trump's favor of the new central bank chair.
2026-07-29T14:52:25.000Z
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Stocks drop before the rate decision, as oil surges again
Stocks fell on Wednesday before the Fed decision, with major indexes stumbling on a fresh spike in oil prices. The Dow dropped more than 700 points in morning trading, and the S&P 500 and the Nasdaq 100 were down just under 1%.
"While we don't expect the Fed to hike interest rates on Wednesday, we expect to hear a continuation of the Fed's direct and unambiguous stance that it will not tolerate high inflation," Paul Stanley, managing director and founding advisor of wealth management firm Arca, said.
Stocks fell on Wednesday before the Fed decision, with major indexes stumbling on a fresh spike in oil prices. The Dow dropped more than 700 points in morning trading, and the S&P 500 and the Nasdaq 100 were down just under 1%.
"While we don't expect the Fed to hike interest rates on Wednesday, we expect to hear a continuation of the Fed's direct and unambiguous stance that it will not tolerate high inflation," Paul Stanley, managing director and founding advisor of wealth management firm Arca, said.
Oil prices spiked after fresh fighting between the US and Iran overnight. Brent surged 7%, topping $90 a barrel. US crude was up 7% to $85 a barrel.
Investors are also awaiting mega-cap tech earnings from Microsoft and Meta. The high-stakes reports are set to be a new test of the AI trade, with investors getting more skittish about massive capex spending and the uncertain timeline for a return on those investments.
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2026-07-29T14:30:52.000Z
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Where the Iran war stands
The Iran War, now about five months long and counting, sent global oil prices soaring, driving up inflation rates, despite a slight cooling last month. The US benchmark oil price was around $85 on Wednesday, up from below $70 at the start of July but down from its peak above $90 last week.
And, while Trump has touted various peace deals to end the war, none have yet come to fruition. Traffic through the Strait of Hormuz — a major global trade route in the Middle East — remains far below its pre-war average.
The Iran War, now about five months long and counting, sent global oil prices soaring, driving up inflation rates, despite a slight cooling last month. The US benchmark oil price was around $85 on Wednesday, up from below $70 at the start of July but down from its peak above $90 last week.
And, while Trump has touted various peace deals to end the war, none have yet come to fruition. Traffic through the Strait of Hormuz — a major global trade route in the Middle East — remains far below its pre-war average.
From a financial perspective, the war has been a shock to the markets, with a trickle down effect on consumer prices. Moody's Analytics estimated that the war cost US households $100 billion in its first three months, with top economists saying the conflict is weighing on an "already sagging" domestic economy.
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2026-07-29T13:59:37.000Z
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Inflation cooled last month, but could heat back up
Inflation slowed in June more than expected, from 4.2% in May to 3.5%, the lowest rate since March, and in line with wage growth. The cooler rate was helped by energy prices, but with new tariffs and ongoing challenges in the Strait of Hormuz, inflation could reaccelerate.
"Though some of the existing price growth pressures should work their way out of the data eventually, the Fed doesn't want to act too late," said Elizabeth Renter, NerdWallet's senior economist. "If they choose to hold rates steady and inflation accelerates, it could be more difficult to tamp down later."
2026-07-29T13:27:43.000Z
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A potential hike
With inflation rates still above the Fed's 2% goal, it's likely that the FOMC will take a moderately restrictive policy position. CME FedWatch showed a roughly 2 in 3 chance of a hold as of Wednesday morning, with a 1 in 3 chance for a rate hike.
Keeping rates relatively high would help temper inflation, but it runs the risk of slowing down the job market. Fed leaders will have to decide which side of their dual mandate is most urgent.
2026-07-29T13:00:47.000Z
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Here's how JPMorgan says stocks could react to the decision
Stocks look primed for a big move following the rate decision, JPMorgan said.
Strategists on the bank's market intelligence team laid out several scenarios for how the market could react to the Fed's coming rate decision. The most likely possibility was that the Fed issues a hawkish hold, leading the S&P 500 to drop as much as 0.5%.
Stocks look primed for a big move following the rate decision, JPMorgan said.
Strategists on the bank's market intelligence team laid out several scenarios for how the market could react to the Fed's coming rate decision. The most likely possibility was that the Fed issues a hawkish hold, leading the S&P 500 to drop as much as 0.5%.
- Fed hikes 50bp (1% probability) - S&P 500 falls as much as 4%
- Fed hikes 25 bp (20% probability) - S&P 500 falls as much as 2%
- Hawkish hold (50% probability) - S&P 500 falls as much as 0.5%
- Dovish hold(28% probability) - S&P 500 gains as much as 1%, "the best outcome" for stocks, the bank wrote.
- Fed cuts rates (1% probability) - S&P 500 could lose 1% or gain as much as 1.5%, depending on how much investors worry about Fed independence
Options pricing is implying a 0.8% move in either direction on Wednesday, the strategists said.
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2026-07-29T12:29:47.000Z
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There are some concerning signs in the job market
Unemployment and labor force participation rates edged down in June. Job growth badly missed expectations last month, with a large drop in leisure and hospitality, and previous job growth was revised down.
Economic analyst Mark Hamrick thinks people need to continue to monitor the job market as a harbinger for the broader economy.
Unemployment and labor force participation rates edged down in June. Job growth badly missed expectations last month, with a large drop in leisure and hospitality, and previous job growth was revised down.
Economic analyst Mark Hamrick thinks people need to continue to monitor the job market as a harbinger for the broader economy.
"If the job market were to weaken substantially, that would create additional financial pressures for individuals and households, and threaten consumer spending," Hamrick said.
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2026-07-29T11:58:49.000Z
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From a traditionalist to a modern chair
Largely, Powell was a traditionalist in the chair role, leaning on long-held data sources like the jobs report and monthly consumer price index when making rate decisions. He also kept a consistent schedule of quarterly economic projections.
At the June meeting, Warsh said he plans to do things differently, assigning task forces to revamp the way that the Fed makes rate calls and rethinking the way the central bank releases information to the public. In this new era, he hopes to modernize the Fed.
2026-07-29T11:28:10.000Z
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Powell is still present
Former Chair Jerome Powell's term at the head of the bank ended in May, although his seat as a Fed governor is set to last through 2028. Taking the helm in 2018, he had shepherded the Fed through the COVID-19 pandemic, 2022 inflation highs, geopolitical conflicts, and White House transitions. Powell consistently held a moderately restrictive policy stance, to the dismay of Trump, who has called for lower rates.
Powell is remaining on the FOMC as a governor until he feels the Department of Justice probe into the Fed is "well and truly over." Still, he emphasized that he won't be a "shadow chair."
2026-07-29T10:57:04.000Z
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Task force leadership
The central bank announced leaders for Warsh's task forces in early July. Alongside FOMC leaders, the groups will be led by economics and finance professors across various elite universities, alongside some ex-Fed governors, finance executives, and C-Suite leaders. Big names include former President and CEO of Walmart Doug McMillon on the data task force and Marc Andreessen, cofounder and general partner of Andreessen Horowitz on the jobs and productivity task force.
2026-07-29T10:29:47.000Z
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'We have a task force for that'
Warsh introduced a slew of task forces to rethink the Fed's approach to decision-making.
At the June meeting, he said he would appoint independent groups of economic experts, partnered with FOMC leaders, to oversee his new initiatives. The task forces will focus on the Fed's handling of data, jobs and productivity, communication, inflation, and the balance sheet.
Warsh introduced a slew of task forces to rethink the Fed's approach to decision-making.
At the June meeting, he said he would appoint independent groups of economic experts, partnered with FOMC leaders, to oversee his new initiatives. The task forces will focus on the Fed's handling of data, jobs and productivity, communication, inflation, and the balance sheet.
Warsh said the phrase "task force" two dozen times during the roughly 42-minute press conference.
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2026-07-29T09:58:00.000Z
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What we know about Warsh
Warsh — a former Wall Street executive and ex-Fed governor — was nominated by President Donald Trump and led his first meeting in June. With a roughly $100 million net worth, he is the wealthiest Fed chair in history and has a reputation for being tough on inflation.
"If we do our job, we can make strong growth, low prices, and strong employment mutually compatible," Warsh said in June. "What you heard from the committee today is we've got some work to do on the price stability front."
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