The September 2026 FOMC decision to raise the federal funds target range to 3.75-4.00% marked the first hike in three years, driven by persistent inflation projected at 3.7% for 2026 and solid economic growth. Minutes from that meeting showed most participants viewing another 25-basis-point increase as likely appropriate by year-end, with the median dot plot at 4.1% for both late 2026 and 2027. Resilient labor markets, AI-driven demand pressures, and upside inflation risks have reinforced the hawkish tilt, while market pricing assigns only modest odds to an October move and focuses on the December decision. Key near-term catalysts include the October 27-28 and December 8-9 FOMC meetings plus incoming CPI and employment data that could shift the rate path.