Two macro debates are dominating published research this week: what the Fed does at its July 2026 meeting under Chair Warsh's guidance-free approach, and whether the AI capex boom can keep justifying itself.
On the Fed, market-implied odds of a hike sit around 35–40%. One camp of analysts argues the case for a hike is compelling — a five-year inflation overshoot, easy financial conditions, and resilient growth. A contrarian thread of recent research leans toward a data-dependent hold, pointing to a flatter yield curve and cooling inflation. Several researchers stress that Warsh's deliberate move away from forward guidance is itself amplifying uncertainty — the Fed reportedly has five internal task forces working the question.
On AI, the published consensus flags hyperscaler capex climbing above $800bn in 2026 and toward $1.3tn in 2027. But investors are shifting from rewarding ambition to demanding returns. The stress shows most in Asia: Korea's KOSPI triggered a trading halt, the Nikkei fell about 4%, and Chinese lithography advances rattled global chip names. Some recently-published views warn of circular financing and echoes of the late-1990s telecom overbuild; others remain constructive on US tech fundamentals.
Key catalysts ahead: the July 29 FOMC decision, megacap tech earnings, US Q2 GDP and June PCE, and Australian CPI.