Reasoning
The Federal Reserve's current target range of 3.50 to 3.75 percent has not changed since June 2026, and the median SEP projection for the year-end 2026 funds rate is 3.8 percent, indicating some expectation of rate hikes. Additionally, nine of eighteen SEP participants foresee rates moving above the current range, suggesting that a significant number of officials favor tightening. Given these conditions, there is a plausible trajectory for rate hikes, although the lack of a definitive commitment from the Fed introduces some uncertainty.Key uncertainty
The timing and magnitude of any future rate hikes by the Federal Reserve, particularly in light of evolving economic indicators, which could greatly influence investor sentiment towards fed funds futures.