Renewed U.S. strikes near the Strait of Hormuz pushed oil prices higher heading into month-end, underscoring how the ongoing U.S.–Iran conflict continues to influence global energy markets. Meanwhile, inflation has remained more persistent than policymakers had hoped, while a summer of softer labor-market momentum has added complexity to the outlook. Against this backdrop, the new Federal Reserve chair has adopted a more hawkish tone. The Chandler team continues to expect the Federal Reserve to keep the federal funds rate unchanged through the remainder of 2026, provided that both realized and market-based inflation measures remain contained.
The Federal Open Market Committee is scheduled to meet next on September 15-16, 2026. Although the FOMC held the Fed’s benchmark rate at 3.50% to 3.75% following the July 28-29 meeting, market participants inferred a hawkish tone from Chair Kevin Warsh during his August 28th speech at the Jackson Hole Economic Symposium, where he emphasized that the Fed “we have work to do.” if price pressures remain elevated. The July FOMC meeting minutes highlighted concerns that successive supply shocks related to tariffs and the U.S.–Iran conflict have driven recent inflationary pressure. The July decision was not unanimous, as the Committee voted 9 to 3 to hold rates, with Presidents Beth Hammack, Neel Kashkari and Lorie Logan each dissenting in favor of a 25 basis point increase.