Bloomberg Surveillance · Monday, July 27, 2026
Lindsay Graham suggests that the Federal Reserve is likely to keep interest rates on hold due to a clear divide between hawkish and dovish members. While disinflation data supports a dovish stance, persistent inflation, double the Fed's target, and risks of rising energy costs due to overseas tensions favor a more aggressive approach, leading to a policy standstill.
“As I suggested, this ongoing conflict, this clear divide between the hawkish and more Dubbs members, is likely to result in policy simply remaining steady on hold for the next several meetings.”
“On the flip side, even with this recent cooling from peak levels, inflation is still double the Fed's intended target, and with the risk of upside pressure further rising tensions overseas resulting in additional upside pressure and energy costs. This puts the FED, the more hawkish members at an easy position that we should take this more aggressive action and reverse some of that policy easing that we saw into the end of last year.”