**Persistent inflation above the Fed’s 2% target and a solid labor market have driven the overwhelming 96% market-implied probability of zero federal funds rate cuts in 2026.** Following the September 2026 25-basis-point hike to the 3.75%-4.00% range—the first since 2023—the FOMC’s updated projections showed a median endpoint rate around 4.1% for both 2026 and 2027, with 16 of 18 participants anticipating at least one additional hike by year-end and none penciling in cuts. Core PCE inflation near 3.4% and unemployment holding around 4.1% have reinforced the hawkish tilt, with officials emphasizing upside inflation risks and the need for a timelier return to target. Recent minutes and speeches, including from Governor Waller, underscore that further tightening remains likely if data align, keeping easing off the table. The primary near-term catalysts include the October 14 CPI release, the October 28 FOMC decision, and December projections. A sharp deterioration in labor market data or a swift decline in inflation toward 2% could open the door to cuts, though current conditions make such shifts appear distant.