FOMC Meeting Update
The July FOMC meeting resulted in a rate hold, consistent with softer-than-expected payrolls and CPI data. Despite market anticipation, Fed leadership provided little clarity or substantive forward guidance, opting instead for rhetoric that the author describes as 'spin.' The analyst maintains a forecast for a 25bps per quarter tightening cycle starting in September, citing the ongoing inflation overshoot and signs of labor market reacceleration as the primary drivers.
Kevin Warsh's attempt to 'boring' the policy process has backfired, creating unnecessary speculation and a 'live' meeting atmosphere that ultimately resulted in no change. The author notes that inflation remains well above the 2% target, and the central bank has lost the ability to ignore the sustained overshoot.
The broader market narrative regarding AI-capex and an immunity to higher rates is being tested. With the FOMC refusing to offer clear guidance, the author warns that market sentiment could become increasingly volatile as the reality of a tightening cycle in late 2026 and 2027 sets in.
Source: TS Lombard, Finvaulta... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Good to see a rate hold framed plainly, which makes it easier to keep a steady approach while the broader narrative shifts around it.... Show More
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Sun Sep 13 2026 01:37:49 GMT+0000 (Coordinated Universal Time)
