Persistent inflation above the Fed’s 2% target, with August core PCE at 3.4%, combined with resilient growth and a solid labor market, underpins the 79.5% market-implied probability of at least one additional rate hike in 2026. The September FOMC’s unanimous 25-basis-point increase to the 3.75-4.00% range and the dot plot—showing 16 of 18 participants projecting further tightening by year-end—shifted trader consensus toward additional policy tightening. Recent minutes and comments from officials including Waller and Musalem reinforced expectations of a December move after an October pause, with futures markets pricing roughly an 85% chance of at least one hike by the December meeting. Key near-term catalysts include the October 28-29 FOMC decision, November CPI, and December employment data.