Boards at four of the Federal Reserve’s 12 regional banks recommended raising the discount rate ahead of the July 28-29, 2026 FOMC meeting, signaling concern that inflation remains above the Fed’s 2% target. Reporting on August 25 said those regional directors sought the increase before policymakers met. The Federal Reserve left the federal funds target range unchanged at 3.50%–3.75% in a 9-3 vote, and meeting minutes pointed to widening differences over inflation and the broader economy. June PCE inflation was estimated at 3.7%, with core PCE at 3.3%, while July CPI rose 3.4% from a year earlier. Market pricing put the probability of a rate increase by the September 2026 meeting at 33.5%, and the debate over how forcefully to respond to price pressures is set to continue as officials set future policy, keeping focus on upcoming inflation data and comments from Chair Jerome Powell.