Four of the twelve regional banks of the Federal Reserve advocated for an increase in the discount rate during the July 2026 policy meeting. The Fed’s Board nonetheless voted 9-3 to maintain the federal funds target range at 3.50%–3.75%. This decision comes amid persistent inflationary pressures, with the personal consumption expenditures inflation rate estimated at 3.7% in June, well above the Fed’s 2% target. Markets now price in a 33.5% probability of a rate hike at the September 2026 meeting.
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