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US: Policy Rate Held At 4.5% (Consensus 4.5%) in Jul-25

• The Federal Reserve maintained rates at 4.25%-4.5% in a 9-2 decision, with Governors Bowman and Waller dissenting in favour of a 25bp cut—marking the first double dissent by Board members since 1993 amid deepening divisions over the appropriate timing for policy easing.
• The Committee downgraded its growth assessment while acknowledging that inflation remains "somewhat elevated". Chair Powell emphasised no decisions have been made regarding September rate cuts, maintaining a cautious, data-dependent approach.
• Future interest rate decisions will hinge on the persistence of tariff-induced inflation, labour market resilience, and the anchoring of inflation expectations, with dissenting governors arguing that transitory tariff effects should not preclude supporting employment through rate cuts

Opec: Twist Or Stick?

• The further acceleration by ‘Opec+ eight’ in unwinding the second package of voluntary output cuts was a surprise, albeit one that left markets unmoved.
• The cartel now appears to be firmly on track to complete its unwinding in September, even though its stated justifications for increasing output remain highly questionable.
• Despite downside global growth risks, the Saudis in particular may press to start unwinding the first package, a move which may be announced as early as next week.

By Alastair Newton