Persistent inflation above the Fed’s 2% target, with August PCE at 3.4% year-over-year and core measures near 3%, alongside the September FOMC’s hawkish SEP projecting a 4.1% median funds rate by year-end, underpins trader expectations for one additional 25-basis-point hike. Recent softening in labor data, including the September nonfarm payrolls gain of just 29,000 and unemployment rising to 4.2%, has tempered near-term tightening odds, supporting the 50% market-implied probability on a pause-hike-pause sequence across the October, December, and January meetings. CME FedWatch pricing reflects this path, with only a 22% hike probability priced for late October versus elevated odds for December. Upcoming September CPI and October employment releases represent key swing factors that could shift the balance between a single hike or further pauses.