Fed: Rate Hike on the Table if Inflation Fails to Cool

According to the minutes of the US Federal Reserve's July meeting, released on Wednesday, August 19, 2026 (28 Mordad 1405), most Fed officials supported raising interest rates if inflation fails to cool. According to Arzdigital, three members of the Federal Open Market Committee, Beth Hammack, Neel Kashkari and Lorie Logan, dissented against holding rates steady at that meeting and called for an immediate quarter point hike. Fed Chair Kevin Warsh said the September rate decision will depend on developments in the Middle East and two more inflation reports.

Markets now expect one to two rate hikes by the end of 2026, the report said, reversing earlier expectations of rate cuts. The main driver of the shift is described as the energy price shock stemming from tensions with Iran, which has changed the market's outlook from rate cuts to hikes.