Fed Will Hold Rates at July Meeting and Through 2026, Natixis Says, as June Data Shows Softer Jobs Growth and Disinflation

According to Natixis economists Christopher Hodge and Selin Aker, the Federal Reserve will likely keep rates unchanged at its July meeting and maintain that stance through 2026, as recent economic data supports an extended pause. June's employment report showed payroll gains of 57,000, softer than the preceding three-month average of 164,000, while headline CPI declined 0.4% on the month and core CPI remained flat, according to their FOMC preview.

Natixis expects the vote may not be unanimous, with Dallas Fed President Lorie Logan potentially dissenting in favor of a hike. The firm cautioned that further tariff actions and energy price volatility related to Iran pose upside risks to their inflation outlook, but said the Fed is likely to wait for clearer evidence before changing policy.