Recent inflation readings, including PCE at elevated levels around 3.3–4.1% year-over-year through mid-2026 amid energy supply shocks from Middle East tensions, have anchored trader expectations for a 25-basis-point hike as the next move, reflected in the 59.5% market-implied probability. The July FOMC minutes highlighted broad support for tighter policy if price pressures fail to moderate, with three regional presidents dissenting in favor of an immediate increase and the June dot plot showing nine participants projecting at least one hike by year-end. A resilient labor market, with unemployment near 4.1–4.2% and steady job gains, has further reduced the urgency for easing while supporting the current 3.50–3.75% target range. The September 16 FOMC meeting remains the key near-term catalyst, with incoming CPI and employment data likely to drive repricing of the rate path versus futures-implied expectations.