Federal Reserve Expected to Hold Rates Steady at This Week's FOMC Meeting, BNY Mellon Forecasts

According to BNY Mellon strategists on July 28, the Federal Reserve is expected to hold interest rates steady at this week's FOMC meeting, though the decision remains a close call with rate hikes and cuts balanced. If rates are held, dissenting hawkish votes are likely; if rates are raised, one or two dissenting votes supporting a hold may emerge. BNY Mellon forecasts that a hawkish hold—signaling a September rate increase—would create upward pressure across the yield curve, though gains would be modest given market expectations already reflect the September move. Forward guidance details remain uncertain given Fed Chair Kevin Warsh's preference for avoiding forward guidance.
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