The Federal Reserve's September 2026 decision to raise the federal funds target range to 3.75-4.00% for the first time since 2023, paired with updated Summary of Economic Projections showing a 4.1% median rate for year-end 2026 and 2027, anchors trader sentiment around further tightening before 2027. Elevated PCE inflation near 3.7% for 2026, resilient GDP growth, and a solid labor market with unemployment around 4.1% have shifted the policy outlook hawkish, with most officials seeing at least one additional 25 basis point hike by December. Recent comments from policymakers like Kashkari highlight upside inflation risks and openness to moves into 2027, while markets now price limited October action but potential December tightening. The October 27-28 and December 8-9 FOMC meetings, alongside incoming inflation and employment data, remain key near-term drivers.