Recent July CPI data showed headline inflation easing modestly to 3.4% year-over-year, with core at 2.5%, yet both remain well above the Fed’s 2% target amid energy supply shocks from Middle East tensions. The July FOMC minutes revealed growing hawkishness, with three dissents favoring a 25-basis-point hike and many participants signaling that tighter policy would likely be needed absent further disinflation. Markets currently price limited odds of near-term easing, with the federal funds rate held at 3.50–3.75% and trader focus on the September FOMC meeting and dot plot for signals on the rate path versus 2027 expectations. Softer labor data has tempered immediate hike bets but has not shifted consensus toward cuts.