Recent soft labor market data and cooling inflation readings have tempered near-term hike expectations, yet the Federal Reserve’s September 2026 rate increase to the 3.75–4.00% target range and median dot-plot projection of one additional move by year-end continue to anchor trader consensus around a 72.5% implied probability of another hike in 2026. Persistent inflation—August core PCE at 3.4% and CPI at 3.4% year-over-year—remains well above the 2% goal, while resilient economic activity and earlier hawkish communications from officials such as Williams and Kashkari support expectations for a December adjustment. Market-implied odds now place December odds above 65%, with October largely priced out following the weak September payrolls release. The December FOMC meeting remains the key near-term catalyst.