Suspense Around Today’s Fed Decision, Renewed Military Strikes in Mideast & Continuing Pressure on Semiconductors
July 29, 2026
It is thought that the Fed will most likely hold off until the next FOMC meeting in September before raising its 3.5-3.75% interest rate target, but the chance of it happening today at 18:00 GMT is not insignificant. Chairman Warsh’s press conference starts at 18:30.
The U.S. claims to have repelled several Iranian missiles aimed at U.S. military installations around the Gulf. The mere violation of the latest ceasefire, however, was enough to send the price of West Texas Intermediate crude oil, now $83.25/barrel, up 4.8% overnight.
Political second thoughts about artificial intelligence and concerns about America’s increasingly imbalanced economic growth are maintaining downward pressure on tech stocks in general and semiconductors in particular.
Two central banks aside from the Fed have already made interest rate decisions today. The National Bank of Georgia and Central Bank of Uzbekistan respectively left such unchanged at 8.25% and 14.0%, respectively. Also, the European Central Bank’s chief economist said a moderate inflationary shock is persisting, while Peter Kazimir (Slovakia’s central bank governor and a member of the ECB Governing Council) opined that at least one rate hike will probably be needed there soon.
In global financial market activity overnight,
- The weighted DXY dollar index edged less than 0.05% higher. The Japanese yen and Indonesian rupiah remain historically weak, the former on frustration over the slow normalization of the Bank of Japan’s interest rate from a very low level and the latter in continuing reaction to the abrupt resignation of Indonesia’s central bank chief.
- The effect of renewed military actions involving Iran had its most direct overnight effect on sovereign debt yields, which rose by six basis points in the U.K. and Italy, five bps in France and Spain, three bps in the United States and Germany and two bps in Japan and Switzerland.
- Prices for Bitcoin and silver increased 0.7% and 0.6%, while gold edged 0.2% lower.
- Equity markets in the Pacific Rim rose 2.0% in Hong Kong, 1.2% in India and 1.0% in Australia but tumbled 6.0% in South Korea and 3.8% in Taiwan. European bourses also experienced mixed results, falling by 1.1% in Spain and 0.5% in France thus far but rising 0.3% in the U.K. and Germany. DOW futures are down 0.7%, while the other three major U.S. stock market barometers show hardly any net overnight change.
Australian consumer price inflation in June undershot expectations, slipping 0.1% on moth and to a 3.8% 12-month rate of increase. In the second quarter as a whole, the CPI went up 0.6% on quarter, down from the 1.4% first-quarter jump, and 3.9% on year. But the 3.6% trimmed mean measure of core consumer price inflation was above readings of 3.5% in the first quarter, 2.7% in the second quarter of 2025, and the 2-3% targeted range.
Producer price inflation in Singapore settled back from May’s record high of 34.1% to a 3-month low but still very elevated 30.3% especially when compared to January’s reading of -1.6%.
GDP data from last quarter were reported by Belgium, Ireland and Sweden. Flat quarter-on-quarter growth in Belgium constitutes a 22-quarter low and was associated with on-year growth of just 0.5%, its lowest in 21 quarters. Irish GDP rebounded 3.9% last quarter, slashing the year-on-year growth pace to -1.6% from -13.0% in the first quarter. Swedish GDP grew faster than forecast, rising 1.4% versus 1Q and by the most in a year and a half (2.8%) when compared to the same quarter one year earlier.
Other data release highlights include an 8-month high in Austria’s manufacturing purchasing managers index, ,which at 51.5 in July was above the 50 neutral level for a fifth straight time. Croatian industrial production was robust in June, climbing 5.3% on month and 4.3% on year. Retail sales in Latvia rose 0.6% on month and 4.8% on year in June. Industrial sales in Italy in that same month grew 0.5% from May and 5.3% versus a year earlier.
British mortgage approvals totaled 58.2k last month, more than had been anticipated and May’s total but 10% fewer than in June 2026.
U.S. mortgage applications last week slumped 6.4%, their biggest drop in nine weeks, as the 30-year fixed mortgage rate climbed to a 51-week peak of 6.76%.
In announcing the aforementioned decision to leave Georgia’s central bank interest rate steady at 8.25%, a released statement added that “given the elevated inflationary risks, the tightened monetary policy stance is expected to be maintained for an extended period.” CPI inflation in Georgia currently stands at 5.8%. In Uzbekistan’s case, the central bank interest rate that has been at 14.0% since last August is more than double the latest 6.4% reading on consumer price inflation.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Australian CPI, Central Bank of Uzbekistan, National Bank of Georgia
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