Persistent inflation above the Fed’s 2% target, combined with resilient growth and a tightening labor market, underpins the 80.5% market-implied probability of at least one additional rate hike in 2026. The October CPI print showed year-over-year prices at 3.7%, while the October employment report surprised to the upside with 165,000 jobs added and unemployment at 4.1%. After the September 25-basis-point increase that lifted the target range to 3.75–4.00%, two FOMC members dissented in favor of further tightening at the October meeting. Traders now assign roughly 80% odds to a December 8–9 hike, with the December decision serving as the primary near-term catalyst that could confirm or temper the path for additional 2026 policy adjustments.