Fed Expected to Keep Rates on Hold Wednesday

Summary

Bloomberg's Michael McKee previews the Federal Reserve meeting, where economists widely expect rates to remain on hold, though a minority see a hike possible. He discusses internal FOMC dissent, the Wall Street Journal report of a boardroom fight, and market pricing that already anticipates a September rate cut or a de facto tightening via a rising yield curve.

• 88 economists surveyed by Bloomberg overwhelmingly expect the Fed to hold rates steady.
• A few firms like Citadel and High Frequency Economics predict a rate hike; futures imply a 36% chance.
• Descents from regional presidents like Hammack and Logan are forecast, while board-level division draws attention.
• Markets are pricing a 100% probability of a September rate cut according to the speaker.
• Major banks see the yield curve rising even if the Fed holds, effectively tightening conditions.
• Internal tensions between new Fed Chair Kevin Warsh and existing governors like Chris Waller are noted.
• The speaker expects efforts toward unanimity but acknowledges hawkish resistance.