Reasoning
As of late September 2026, the FOMC is positioned significantly above the June 17 baseline of 3.50 to 3.75 percent. The June 2026 SEP median projection of 3.8 percent year end already pointed toward a hike, with nine of eighteen participants projecting above the current range. Kevin Warsh's Fed leadership and the explicit erasure of cutting bias at the June meeting established a hawkish directional bias. Given that we are now in late September with only roughly three months remaining in 2026, a rate increase above 3.75 percent appears highly probable if inflation persistence or upside surprises have materialized or are anticipated. Historical precedent shows the FOMC typically follows its own SEP medians and participant projections with reasonable fidelity when consensus is this clear.Key uncertainty
The exact trajectory of core inflation and wage growth data between July and December 2026. If disinflation accelerates materially in recent months and incoming data shows meaningfully slower momentum, the Fed could hold steady despite earlier hawkish guidance, preventing a more restrictive stance by year end.