**Trader sentiment in the Fed December decision market heavily favors a 25 basis point rate increase at 76.5% implied probability, reflecting the Federal Open Market Committee's hawkish September 2026 shift.** Following the unanimous 25 bp hike to the 3.75-4.00% target range, the updated dot plot showed a 4.1% median endpoint for 2026 with 16 of 18 participants expecting at least one additional hike by year-end. Elevated inflation—core PCE near 3.3% and headline readings boosted by energy prices—has stalled disinflation, outweighing a stable labor market with unemployment around 4.1%. This positions December as the likely venue for the next move, consistent with market-implied odds and analyst forecasts. Key upcoming catalysts include October and November data releases ahead of the final 2026 FOMC meeting, where any further upside surprises in prices could reinforce the current pricing while softer figures introduce uncertainty around the path.