Experts' Opinions on the Future Fed Rate Decision Are Divided

The Federal Reserve is expected to hold a meeting on interest rates on July 29. The market is pricing in a 66% probability of holding the rate steady, with a 33% chance of an increase. Incrypted has gathered insights from leading experts on this matter.

On July 29, 2026, the Federal Open Market Committee (FOMC) will meet to decide on the interest rate. A scenario of policy easing is not even being considered, while there is a fairly high probability—over 33%—that the rate will be raised by 0.25%, according to CME forecasts.

Previous Meeting and Warsh's Position

Last time, the Fed left the interest rate unchanged at 3.5%-3.75%. It is worth noting that the probability of policy easing was low amid high inflation in May 2026 and elevated oil prices.

Additionally, the regulator's chair, Kevin Warsh, stated that the Fed would signal less and generally revise its approach to policy determination. He reiterated this during congressional hearings.

The question of what the regulator's decision will be on Wednesday, July 29, remains open. Inflation slowed down in June. Meanwhile, at the beginning of July, the U.S. and Iran returned to active hostilities, pushing oil prices higher.

At the time of writing, the probability that the Fed will maintain the rate at its current level stands at 66.3%, while the chance of an increase is 33.7%, according to CME.

Experts' Opinions

Advocates for Rate Increase

Neil Datta, head of economic research at Renaissance Macro, believes Warsh will be "forced" to raise the rate. He stated this in a comment to Bloomberg on July 24.

"If you have low inflation this month, then likely in the next two it will be high. Why not do it [raise the rate] now?" the publication quotes him.

In his commentary, Datta outlined three main factors indicating a high probability of policy tightening:

• high demand for AI, which is pushing prices up;
• the escalation of conflict continues to impact the energy market, with oil prices rising;
• tariff policy has not eased.

Datta emphasized that in the current conditions, "it is wiser to raise the rate when you can than to do it when you must." At the same time, the expert acknowledged that Warsh might push for a decision to hold the rate in July, but then he would lose votes and be forced to tighten policy later under potentially worse conditions.

He was supported by experts such as Luke Kawa, Ritesh Jain, and Mike Zaccardi. All pointed out that Warsh has become a hostage to his own statements.

Another opinion in favor of a potential increase comes from Jim Bianco, president and macro strategist at Bianco Research. However, his position is more cautious.

He believes that between three and seven FOMC members will advocate for tightening policy in July. This is not enough for a convincing advantage in favor of raising the rate.

At the same time, the expert expects the regulator to tighten policy in September 2026 with a probability of 104%.

"They cannot vote 11 against 1 at this meeting and raise the rate at the next one, given that several voting members have made speeches stating that, in their opinion, the rate should be raised. This is a new Fed with 12 independent voting members. Warsh likes to say: 'Inflation is a choice.' Make a decision to do something about it," he concluded.

It is noteworthy that Bianco and other experts appeal to Warsh's words, as market indicators are effectively demanding that he raise the interest rate.

Those Who Think Otherwise

However, some analysts lean towards the view that the rate will remain unchanged. Among them is James Knightley, chief international economist at ING.

In his opinion, the Fed will leave the rate unchanged. The main arguments are that June's inflation was significantly weaker than expected, and the labor market has also softened, so there is no urgent need to raise the rate now. At the same time, Knightley believes that the regulator will be forced to tighten policy in September.

Additionally, Reuters published the results of a survey of 104 experts. Most of them expressed that the regulator would keep the rate unchanged in July.

"There are people who expect Warsh may tighten monetary policy relatively early during his term. We believe he is rather stalling and trying to convince the markets of his capability, but in reality, he would prefer not to raise interest rates," said Jeremy Schwartz, senior economist at Nomura in the U.S., in a comment to the publication.

At the same time, both maintaining the rate at the current level and raising it could negatively impact high-risk assets, including Bitcoin.

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