Fed Minutes Today: What the July rate decision reveals about the upcoming September FOMC meeting

What makes the minutes interesting is the split vote seen at July’s FOMC meeting. Three out of twelve members voted for a rate hike, a sign of hawkish thinking among some policymakers and a lack of full agreement. The minutes will also give investors clues on how seriously the Federal Reserve is considering additional interest rate increases.

Sentiment Has Shifted Since July

At the July FOMC meeting, rate hike expectations were strong. Markets were pricing in a 65% probability of a rate hike at the September FOMC meeting. Since then, that expectation has fallen sharply. As of August 18, the CME FedWatch tool shows only a 35% probability of a rate hike next month.

What caused this shift? A weak jobs market report is the main reason. Markets now do not expect the US Fed to hike rates anytime soon. At most, the central bank is likely to wait and study incoming jobs market data over the next few weeks before the next FOMC meeting, scheduled for September 15-16. Raising interest rates to boost the labor market could push up inflation, which remains above the US Fed’s 2% target.

Inflation Is Cooling, But Oil Could Complicate Things

US inflation is cooling, but a surge in oil prices may play spoilsport. The July CPI inflation report showed a 3.4% year-over-year increase, a slight decrease from June’s 3.5%. Core CPI rose 2.5%, down from 2.6%, its lowest level since February.

Meanwhile, oil prices continue to rise, breaching $91 on August 18. The 60-day ceasefire has ended, and President Trump has declined to renew it. The closure of the Strait of Hormuz continues to put pressure on oil prices, which in turn adds to inflation and complicates the US Fed’s monetary policy decisions.

Why the Fed Has Gone Quiet on Guidance

Kevin Warsh, the new Fed chief, has taken steps that have unsettled some market participants. Warsh has changed the Fed’s communication strategy, leaving market stakeholders uncertain about future guidance. This leaves bond valuations and risk-management models dependent on speculation rather than a clear, data-based strategy.

Since Warsh became Fed Chairman in 2026, the US central bank has shifted to a simpler communication approach. This means eliminating forward guidance, streamlining FOMC statements, and focusing on current economic conditions rather than future interest rate signals. Warsh himself did not offer his interest rate outlook in the ‘dot plot’ released in July.

The next big event is the Fed’s annual economic symposium in Jackson Hole, Wyoming, held in late August, where Warsh could indicate his approach toward a more restrained communication strategy.

Fed Rate Actions Through 2026

In 2026, the US Federal Reserve has kept interest rates unchanged since its last cut in December 2025. Three more FOMC meetings are scheduled for 2026, in September, October, and December.

There is a lot of jobs market and inflation data due before each of these meetings. Upcoming economic data, including August CPI, PPI, and jobs market figures, could shape the narrative ahead of those meetings. Still, unless the data changes the outlook dramatically, the Fed is likely to keep interest rates unchanged next month.

What Investors Should Watch

Two things matter most right now: bond yields and Iran-war-dependent oil prices. The US 30-year yield is above 5.3%, reaching 2007 highs amid fears of a possible reacceleration of inflation in the United States, while the 10-year yield approaches 4.7% despite weaker US economic data. Any news from Iran could significantly affect financial markets, at least in the near term.

Disclaimer: This article is for informational purposes only and should not be construed as financial or investment advice. Interest rate decisions, inflation data, and market probabilities discussed here are subject to change based on incoming economic data and geopolitical developments. Readers should consult a qualified financial advisor before making investment decisions.