Reasoning
The Federal Reserve has signaled a hawkish shift, erasing its prior cutting bias in June 2026 and raising the median year end 2026 funds rate projection to 3.8 percent in the March 2026 SEP, significantly above the current 3.50 to 3.75 percent target range. Nine of eighteen SEP participants projected a year end 2026 rate above the current range, indicating a divided but leaning hawkish outlook among FOMC participants. However, the "major economist survey" median respondent expectation for a hike in H2 2026 has not been explicitly stated, and economic data between now and then will be crucial.Key uncertainty
Future inflation and employment data releases and their impact on Fed communication and subsequent SEP projections.