Reasoning
The FOMC's median projection for the year end 2026 funds rate has significantly shifted upwards from 3.4 percent in March to 3.8 percent in June. Coupled with nine of eighteen participants projecting a year end rate above the current 3.50 to 3.75 percent target range and the recent removal of a cutting bias, this indicates a strong inclination towards tighter policy. The Fed Chair's stance and the market's expectation for a pivot away from cuts further support this trajectory.Key uncertainty
Persistent inflation surprises could force the FOMC to hike rates to achieve their inflation mandates, overriding other considerations.