The Federal Reserve Should Raise Interest Rates Today, but It Won't for One Fundamental Reason

The Federal Reserve is unlikely to raise interest rates on July 29, 2026, despite rising inflation pressures from energy costs and 'Trumpflation,' because the FOMC operates reactively based on backward-looking economic data rather than proactively. While June Core PCE data won't be released until after the meeting and headline inflation has only recently shown signs of reacceleration, a rate hike is more probable at the September FOMC meeting. Fed Chair Kevin Warsh's elimination of forward-looking guidance adds uncertainty to the decision.