Persistent inflation, with July PCE at 3.7% and core at 3.4%, alongside resilient growth and a solid 4.1% unemployment rate, drove the Fed’s unanimous 25bp hike to the 3.75–4.00% target range at the September FOMC meeting. The updated SEP raised the median year-end 2026 funds rate projection to 4.1%, implying at least one additional increase and shifting the market-implied path toward further tightening. Trader consensus, reflected in the leading Hike–Pause–Hike outcome at 41.5%, centers on measured responses at the October and December meetings amid upside inflation risks from energy and supply shocks, while acknowledging potential pauses if data moderate.