Reasoning
The June 2026 SEP median projects year end 2026 funds rate at 3.8 percent, representing a 5 basis point increase from the current 3.50 to 3.75 percent target range. Critically, nine of eighteen SEP participants (50 percent) explicitly project rates above the current range by year end, indicating meaningful hawkish sentiment among Fed officials. With the June 17 meeting holding rates steady and erasing prior cutting bias under Chair Kevin Warsh's leadership, the Fed has shifted toward a data dependent stance that allows for hikes. Since we are now at September 28, 2026, only three months remain in H2 2026, and the SEP guidance from July already reflects expectations for modest tightening. A major economist survey asking about H2 2026 hike expectations would likely reflect this same hawkish shift evident in the dot plot, particularly given the SEP's explicit year end projection above current levels.Key uncertainty
Whether actual inflation and employment data between late September and year end 2026 will force the Fed to cut rather than hike, which could cause major economist surveys to revise downward from the July SEP median projection.