The Federal Reserve's September 16, 2026, decision to raise the federal funds target range by 25 basis points to 3.75–4.00%—its first hike since 2023—reflects persistent inflation, with August PCE at 3.4%, alongside solid GDP growth and resilient spending despite geopolitical risks. A weaker-than-expected September jobs report showing just 29,000 additions has lowered market-implied odds of an October move, with FOMC participants signaling a data-dependent pause at the October 27–28 meeting. The December 8–9 gathering, which includes updated projections, remains the key near-term catalyst, as the median dot plot points to one additional hike this year to around 4.1%. Traders are weighing labor market softening against sticky prices and Treasury yields near 5.24% when assessing the path through year-end 2026.