The Federal Reserve has decided to maintain its benchmark policy rate in the 3.50%-3.75% range, consistent with market expectations. Headline inflation stands at 3.4% year over year, slightly down from June’s 3.5%, while core inflation is at 2.5%. U.S. economic growth slowed to 1.5% annualized in the second quarter of 2026, driven by weaker government spending and slower investments. Market pricing indicates a 33.5% probability of a rate hike by September 2026 and 42.5% by October, signaling continued uncertainty about the Fed’s monetary trajectory.
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