Persistent inflation above the Federal Reserve’s 2% target remains the dominant driver of trader sentiment around federal funds rate expectations. The FOMC raised the target range by 25 basis points to 3.75–4.00% at its September 15–16 meeting—the first hike since 2023—after officials judged progress toward price stability insufficient. Minutes released October 7 showed most participants viewed another increase as likely appropriate by year-end, while the September CPI print of 3.2% year-over-year (core 2.2%) offered modest relief but left headline inflation elevated. Markets currently price a near-certain hold at the October 27–28 meeting, with the December 8–9 decision and accompanying dot plot as the next major catalyst. Cooling labor-market data and upcoming inflation releases will shape whether the implied path tilts toward further tightening or a pause.