The Federal Reserve’s September 2026 decision to raise the federal funds target range to 3.75–4.00 percent, its first hike since 2023, reflects elevated PCE inflation projections of 3.7 percent for 2026 alongside resilient GDP growth near 2.3 percent and unemployment around 4.1 percent. Market pricing and the September dot plot now imply a high likelihood of one additional 25-basis-point increase by year-end, with the median appropriate policy rate at 4.1 percent for both end-2026 and end-2027. The October 27–28 FOMC meeting is expected to hold rates steady ahead of the December 8–9 session, which includes updated projections and could confirm the path. Persistent price pressures above the 2 percent target and a solid labor market continue to anchor trader expectations for the peak rate before 2027.