Fed Expected to Stay on Hold as Inflation Set to Moderate

Dow Jones07-16 18:58

1058 GMT - Pimco continues to expect inflation to moderate over the second half of the year and the Federal Reserve to remain on hold, Tiffany Wilding says in a note. "However, recent communications suggest policymakers are increasingly preparing markets for the possibility of renewed tightening should inflation fail to ease as expected," the Pimco economist says. Additional tightening reinforces the Fed's inflation-fighting credibility and helps anchor long-run inflation expectations, she says. A credible policy response may ultimately reduce the inflation risk premium embedded in longer-dated bonds, limiting upward pressure on long-end yields even as the Fed tightens policy, she says. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

July 16, 2026 06:58 ET (10:58 GMT)

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