Reasoning
The current 3.50 to 3.75 percent funds rate target and the June 2026 SEP median projection of 3.8 percent for year end 2026 already embed a modest tightening bias among nine of eighteen participants, yet only one of the four major banks has shifted its base case to a 2026 hike since the June 17 meeting erased the prior cutting bias. Historical patterns show that when the SEP median is already above the prevailing target range, major dealer base cases typically follow within three to four months, but the Warsh led FOMC has yet to signal an explicit hike path. This timing lag leaves a 38 percent chance that at least one of Goldman Sachs, JPMorgan, Morgan Stanley, or Bank of America will publish an explicit 2026 hike base case by September 30, 2026.Key uncertainty
Whether the next inflation or labor market release before September 30 moves the SEP median projection above 4.0 percent.