The Federal Open Market Committee’s September 2026 decision to raise the federal funds target range 25 basis points to 3.75-4.00 percent, followed by minutes and the Summary of Economic Projections showing 16 of 18 participants expecting at least one additional hike by year-end, forms the core driver of current rate-path expectations. With the effective federal funds rate at 3.88 percent and core PCE inflation holding near 3 percent as of August, policymakers view risks to price stability as skewed to the upside while the labor market remains near full employment. Futures markets currently price a high probability of further tightening before December, with the median SEP path holding the rate at 4.1 percent through 2027. Key near-term catalysts include the October 28-29 FOMC meeting and the December 8-9 gathering that will include updated projections and dot plot.