Fed's July FOMC Hold: What CPI and PPI Cooling Means for Markets

The Federal Reserve enters its July 28-29 FOMC meeting with CME FedWatch pricing a 66.3% probability of an unchanged policy rate at 3.50-3.75%. Behind that single number is a more complicated story: two consecutive inflation undershoots that triggered a broad cross-asset rally, a Fed chair who has publicly committed to not repeating the mistakes of 2021, and a geopolitical wild card sitting directly in the path of every inflation forecast. Key Takeaways CME FedWatch placed the probability of a July 29 hold at 66.3% as of July 23, 2026, down from a 46.5% hike probability on July 13 after back-to-back inflation beats. June CPI fell 0.4% month-over-month, the sharpest single-month decline since…