Reasoning
The FOMC, under Chair Warsh, has signaled a hawkish turn by erasing the prior cutting bias and raising year end 2026 projections in the June SEP to 3.8 percent, with nine participants projecting rates above the current 3.50 to 3.75 percent target range. Given the unchanged rate at the last meeting and the upward shift in projections, holding rates steady at all remaining 2026 meetings aligns with this more restrictive policy stance to combat lingering inflation pressures.Key uncertainty
Unexpectedly sharp and sustained declines in inflation data that would force a reassessment of the need for restrictive policy.