On 29/7, following its two-day policy meeting, the Fed decided to maintain its benchmark interest rate at 3.5-3.75%. This action marks the fifth consecutive decision to hold rates steady this year, contrasting with three rate reductions made last year.

Prior to the meeting, CME Group's FedWatch tool indicated that investors placed a 64% probability on the Fed maintaining its current monetary policy. Christopher Hodge, head of U.S. economic research at Natixis CIB Americas, noted, "If inflation accelerates or remains high, the Fed could increase rates. However, current data is stable, providing them with room to await further signals."

Investors anticipate a Fed rate hike in 9/2026 if U.S. inflation persists above the Fed's 2% target. The country's inflation rate has exceeded 2% for more than five years.

Last month, U.S. inflation moderated, driven by a decrease in gasoline prices, which saw only a 3.5% rise year-on-year. Nevertheless, gasoline prices have recently rebounded as tensions in the Middle East quickly escalated.

Currently, global crude oil prices have risen by approximately 7%, reaching 84-90 USD per barrel, following U.S. President Donald Trump's threat to "hit Iran hard". This resurgence of conflict occurred just days after the U.S. and Iran had declared a cessation of mutual attacks.

Ha Thu (according to Reuters, CNBC)