Reasoning
The current Federal Funds target range is 3.50 to 3.75 percent, with the Federal Open Market Committee (FOMC) signaling a hawkish stance by erasing the prior cutting bias. The median projection for the year end 2026 funds rate has risen significantly to 3.8 percent in the June 2026 Summary of Economic Projections (SEP), with nine participants projecting rates above the current target range. Given this policy environment and the tendency for wage growth to be somewhat sticky and lag, a release of the Atlanta Fed Wage Growth Tracker exceeding 5.0% in H2 2026 is plausible, though not a certainty as wage pressures may begin to moderate in a higher for longer interest rate environment.Key uncertainty
The actual path of inflation in the second half of 2026 and the Fed's reaction to it, particularly if inflation proves more persistent than expected.