Persistent inflation above the Fed’s 2% target and a resilient economy drove the September 16, 2026, 25-basis-point hike to the 3.75–4.00% target range, with the updated dot plot showing a 4.1% median end-2026 rate projection. This hawkish shift, reflecting elevated PCE forecasts of 3.7%, underpins the 62% market-implied probability for an October pause followed by a December hike, ahead of the 23% odds of no further moves. Recent communications from officials, including signals that additional tightening may be needed, have reinforced trader expectations for one more adjustment this year while highlighting uncertainty around October data. The October 28 and December 9 FOMC meetings remain key catalysts.