Will the Fed increase interest rates by 25 bps after the December 2026 meeting?

- [2026-09-16] The FOMC raised the federal funds target range by 25 bps to 3.75%–4.00% at its September 15-16 meeting, its first hike since 2023, in a unanimous 12-0 vote, following a 9-3 hold in July where three members dissented in favor of a hike. The FOMC voted 12-0 to raise the federal funds rate by 25 basis points to a target range of 3.75%–4%. https://www.advisorperspectives.com/dshort/updates/2026/09/16/feds-interest-rate-decision-september-16-2026 - [2026-09-16] The September Summary of Economic Projections showed the median participant expecting the fed funds rate to hike an additional 25bps ending 2026 at 4.1%, with sixteen of eighteen participants expecting one additional rate hike this year, while four projected two additional hikes . https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/fixed-income/fixed-income-perspectives/fomc-statement-september-2026/ - [2026-10-01] FRED's official data confirms the current target range remains 3.75%–4.00% (upper limit) with no changes since the September hike. https://fred.stlouisfed.org/series/DFEDTARU - [2026-10-01] Following cooler-than-expected August core PCE data (3.0% y/y vs 3.3% forecast), October rate hike odds fell to about 35% after U.S. core PCE inflation came in below forecast, with the CME FedWatch tool showing a 34.9% chance of a 25 basis point hike in October, down from 70.9% a week earlier , while the stronger Q2 GDP revision kept a December hike in play. https://babypips.com/analysis/headline-mixed-us-data-october-rate-hike-odds-2026-10-01 - [2026-09-29] Market-implied pricing (Fed funds futures-based model) shows a 46.0% probability of a further 25bp hike at the October 28, 2026 meeting, and a cumulative 82.9% probability that the rate is higher by the December 9, 2026 meeting (implying ~90.8% chance of being at or above a 25bp-higher level, consistent with one or more hikes priced in by year-end). https://centralbank.watch/federal-reserve/ - [2026-10-01] A separate OIS-based tracker (rateprobability.com) showed, as of its live snapshot, a 43% probability of a hike at the October 28 meeting (+10.7bps priced), broadly consistent with the above. https://rateprobability.com/fed - [2026-09-18] Bank forecasts diverge sharply: BMO expects rates to hold steady through 2026 with no hikes, while Bank of America projects three separate 25bp hikes in 2026 (to 4.25–4.50%), illustrating a 90% CME FedWatch-implied probability of at least one more 2026 hike reported around mid-September. https://www.kucoin.com/news/flash/fed-rate-hike-probability-hits-90-by-year-end-2026-cme-fedwatch-shows - [2026-09-16] Chair Kevin Warsh, who has taken a hawkish tone, cited the "resilience of the U.S. economy," noting that "the jobless rate remains low" and that both job openings and hours have been rising as justification for the hike, and signaled openness to further tightening if inflation persists. https://www.kiplinger.com/investing/live/fed-meeting-updates-and-commentary-september-2026 - [2026-10-02] Upcoming scheduled events before the December meeting include the September Jobs Report (Oct 2), FOMC September Minutes (Oct 7), September CPI (mid-Oct), the October 27-28 FOMC meeting, Q3 GDP Advance (Oct 29), and the December 8-9 FOMC meeting (which includes an updated SEP/dot plot). https://primerates.com/primerate/fed-meeting-schedule/ - [2026-09-29] The current effective federal funds rate stands at 3.63%–3.88% (within the 3.75–4.00% target band), and Taylor Rule-style model estimates put the "theoretical" neutral rate well above current policy (model-implied ~4.70%), suggesting the Fed could still be seen as accommodative relative to inflation, a factor supporting further tightening bias. https://centralbank.watch/federal-reserve/ BOTTOM LINE: The Fed has already delivered one 25bp hike in September 2026 (to 3.75–4.00%), its first since 2023, and both the Fed's own dot plot and market-implied pricing (CME FedWatch/OIS-based trackers) assign meaningful but well-below-certain odds to an additional 25bp hike landing specifically at the December 8–9, 2026 meeting, with recent cooler PCE data pulling near-term (October) hike odds down while keeping December "in play." NOT FOUND: No official FOMC statement, minutes, or dot plot for the October 27-28, 2026 meeting exist yet (meeting hasn't occurred as of today, 2026-10-02); no confirmed December 2026 decision naturally since that meeting (Dec 8-9, 2026) has not yet happened; exact current CME FedWatch percentage for the December meeting specifically (as opposed to cumulative trackers) could not be independently verified beyond the third-party models cited above.

- [2026-09-16] The Fed delivered its first rate hike since 2023 at the September 2026 meeting, a 12-0 vote raising the target range to 3.75%–4.00% from 3.50%–3.75%, with the Fed's "dot plot" of economic projections showed 16 of 18 members projecting at least one more rate hike this year . https://www.schwab.com/learn/story/fomc-meeting - [2026-09-16] Historical analogy cited by analysts: in their consideration of monetary policy, most participants supported maintaining the current target range, and participants generally observed that economic activity had continued to expand at a solid pace ahead of the hike, but the article separately notes that true "one-and-done" hiking episodes are rare in Fed history, with the single exception being March 1997. https://www.schwab.com/learn/story/fomc-meeting - [2026-07-29] At the July 2026 meeting (the meeting before the September hike), most participants supported maintaining the current target range for the federal funds rate , showing the committee moved from holding to hiking within two meetings as inflation data worsened. https://www.federalreserve.gov/monetarypolicy/fomcminutes20260729.htm - [2026-09-xx] J.P. Morgan's Michael Feroli stated: "For our part, we continue to look for one more hike at the December meeting, in line with the revised median FOMC expectations" , directly matching the FOMC's own September dot-plot signal of a second 2026 hike. https://www.jpmorgan.com/insights/global-research/economy/fed-rate-cuts - [2026-09-xx] Conversely, J.P. Morgan's broader house view: "Despite growing inflationary pressures, J.P. Morgan Global Research sees the Fed remaining on hold for the rest of 2026," illustrating a split between individual economists and the firm's base case. https://www.jpmorgan.com/insights/global-research/economy/fed-rate-cuts - [2026-08-07] Base rates have been volatile intermeeting: traders on Kalshi saw a 65% chance the central bank holds rates steady in September, while CME's FedWatch put those odds at 60% after a weak jobs report — yet the Fed still hiked weeks later, showing how quickly these odds can flip with data surprises. https://www.cnbc.com/2026/08/07/odds-the-fed-hikes-in-september-tumble-following-big-july-jobs-miss.html - [2026-08-07] Even amid dovish jobs data, CME's FedWatch tool still saw a 55% chance of a hike in October, and an almost 75% chance in December , indicating market participants had assigned December higher hike odds than nearer-term meetings for weeks. https://www.cnbc.com/2026/08/07/odds-the-fed-hikes-in-september-tumble-following-big-july-jobs-miss.html - [2026-10-02] Kalshi's meeting-by-meeting path (as aggregated by DeFi Rate) currently shows October 28 as "Hold" favored (hold ~73%, hike ~29%) while December 9 is priced "Hike" favored (hike ~72%, hold ~31%), with the page noting "December is likelier than October, 69% vs. 26%" for a hike. https://defirate.com/prediction-markets/fed-decision-odds/ - [2026-10-02] A separate, broader "another hike before 2027" contract (covering any 2026 meeting, not just December specifically) stood at roughly 79% Yes on an average of Kalshi/Polymarket, per the same tracker — illustrating that market participants see a 2026 hike as more likely than not, though this is a different (broader) contract than the December-only question. https://defirate.com/prediction-markets/fed-decision-odds/ - [~2026-09-15] Bank of America's house forecast was notably more hawkish than consensus: Bank of America forecasts three 25-basis-point hikes, pushing rates to 4.25–4.50%, projecting three separate 25-basis-point hikes in 2026 , while BMO's Jennifer Lee expected rates to stay steady through 2026 — underscoring a wide dispersion among professional forecasters. https://www.kucoin.com/news/flash/fed-rate-hike-probability-hits-90-by-year-end-2026-cme-fedwatch-shows - [2026-09-18 (169 days before cited page's "age", approx. methodology snapshot)] An explanatory walkthrough of the CME FedWatch Tool using December 2026 as its worked example found futures then implied a 78.2% probability that the rate won't change through December, 15.4% odds of a 25-bp cut, and 5.4% odds of a 25-bp increase — illustrating how fast these odds moved once actual hikes began in September. https://www.schwab.com/learn/story/why-fed-forecasting-tools-are-worth-watching BOTTOM LINE: The reference class here is unusual — the Fed had been cutting through late 2025 and held in early-to-mid 2026 before reversing to hike 25bps in September 2026 (first hike since 2023), and historically such "resume-hiking" episodes almost never stop after a single move (the 1997 one-and-done is the lone precedent cited by analysts). Current cross-venue market pricing (Kalshi, with October favoring a hold and December favoring a hike ~70%+) and the FOMC's own September dot plot, echoed by economists like J.P. Morgan's Feroli, lean toward a second 25bp hike materializing at the December meeting, though a vocal minority of forecasters (e.g., BMO) still expect a prolonged hold. NOT FOUND: No long-run historical base rate (e.g., % of all FOMC meetings since 1990s that produced a 25bp hike, or specifically how often a single hike within a cutting cycle was followed by a second hike within three months) was available in the sources found; also could not find a dedicated, non-stale CME FedWatch December 2026 probability snapshot from within the last few days.

YES means: the FOMC raises the upper bound of the federal funds target range by 25 bps at (or because of) its December 8-9, 2026 meeting, moving it from 4.00% to 4.25%. - [2026-10-02] Kalshi/Polymarket meeting-by-meeting pricing (DeFi Rate aggregator) currently shows the December 9 meeting as "Hike" favored at 72% hike vs 31% hold odds on Kalshi, with the combined Kalshi/Polymarket "hike-by-Dec" figure at 69%, a notably higher conviction level than the October meeting's 26-29% hike odds. https://defirate.com/prediction-markets/fed-decision-odds/ - [2026-10-02] The same tracker shows a broader "another hike before 2027" contract (covering any 2026 meeting) at 79% Yes (Kalshi 80.5¢, Polymarket 76.5¢), confirming markets see a 2026 hike as more likely than not even as October odds have fallen sharply. https://defirate.com/prediction-markets/fed-decision-odds/ - [2026-10-01] CNBC reports that markets subsequently sharply reduced the odds for a hike at the Oct. 27-28 meeting and see a move much more likely in December , directly confirming the market has rotated hike expectations from October into December rather than abandoning them. https://www.cnbc.com/2026/10/01/the-september-jobs-report-will-be-released-friday-heres-what-to-expect.html - [2026-09-29] New York Fed President John Williams, in Buffalo remarks, said the Fed does not need to rush, explicitly stating there is "currently no situation that requires us to act urgently" after the September hike — but this comment itself reinforced market expectations that the Fed would wait and hike in December rather than October. https://en.bitcoinsistemi.com/the-likelihood-of-a-fed-rate-hike-has-dropped-sharply-here-s-why-and-the-latest-update - [2026-09-16] At the September press conference, Chair Warsh explicitly said the September decision to hike was "serious and responsible," framed it as only "remov[ing] a dose of accommodation," and declined to characterize policy as restrictive — language analysts read as signaling more tightening is likely needed, not a one-and-done move. https://www.schwab.com/learn/story/fomc-meeting - [2026-09-16] Immediately after that press conference, CME FedWatch showed the chance of "at least one more hike this year" at 87% (up from 77% pre-meeting) and a 37% chance of two more hikes this year, showing the Fed's own post-hike communication pushed market odds of a second 2026 hike meaningfully higher. https://www.schwab.com/learn/story/fomc-meeting - [2026-08-28] At Jackson Hole, Warsh stated inflation shown in the PCE report "has been increasing by 3 percent" and that the data does "not tell me that underlying trends have meaningfully improved," adding inflation "has been increasing by 3 percent, which is well above pre-pandemic levels" , establishing a hawkish baseline that predates and helped set up the September hike and the December-focused tightening bias. https://www.aljazeera.com/economy/2026/8/28/us-fed-chair-warns-inflation-progress-insufficient-hints-at-rate-hikes - [2026-08-28/31] Multiple sell-side desks reacted to Warsh's Jackson Hole tone by explicitly building in two 2026 hikes: Deutsche Bank continues to expect the Fed to hike 50 basis points this year, with increases at the September and December meetings , while UBS separately wrote it now expects the Fed to raise interest rates twice in 2026, by 25bps in both September and December, taking the federal funds target range from 3.50-3.75% to 4.00-4.25% . https://www.cnbc.com/2026/08/31/jackson-hole-fed-chair-kevin-warsh-hawkish-rate-hikes-analysts.html, https://www.ubs.com/global/en/wealthmanagement/insights/chief-investment-office/house-view/daily/2026/latest-07092026.html - [2026-09-xx] J.P. Morgan's Michael Feroli directly ties his house call to the Fed's own dot plot, stating he continues to look for one more hike specifically at the December meeting, in line with the FOMC's revised median projection — aligning a major bank's economist forecast with the Fed's own SEP signal already noted in prior reports. https://www.jpmorgan.com/insights/global-research/economy/fed-rate-cuts - [2026-10-01] Even amid cooler August core PCE data pulling October hike odds down to roughly 35% (CME FedWatch), the same reporting notes the stronger Q2 GDP revision "kept a December hike in play," indicating the growth side of the data is not undercutting the case for a Q4 hike even as the inflation print disappointed hawks slightly. https://babypips.com/analysis/headline-mixed-us-data-october-rate-hike-odds-2026-10-01 - [2026-10-01] CNBC's September jobs preview notes Fed officials "repeatedly have emphasized the stability of the labor market and say they're more concerned about inflation," with wage growth moderating only modestly to roughly 3.1% y/y — a labor market still read internally as consistent with "full employment," removing a key objection (labor weakness) to a December hike. https://www.cnbc.com/2026/10/01/the-september-jobs-report-will-be-released-friday-heres-what-to-expect.html - [2026-08-28] Fed Governor Beth Hammack separately reinforced the hawkish case at Jackson Hole, "advocating for swift rate hike implementation and projecting year-end inflation near 3%," showing that hawkish conviction extends beyond Warsh alone on the committee. https://parameter.io/warsh-signals-fresh-rate-hikes-at-jackson-hole-september-and-december-now-in-focus/ BOTTOM LINE: The clearest path to YES is a continuation of the same hawkish mechanism that already produced the September hike — Warsh-led, inflation-focused leadership plus a labor market still read as resilient — with the October meeting serving as a "pause" that market pricing (Kalshi/Polymarket ~69-72% hike-favored for Dec. 9) and bank economists (UBS, Deutsche Bank, J.P. Morgan's Feroli) treat as merely deferring, not cancelling, the second 2026 hike onto the December 8-9 meeting. NOT FOUND: No post-October-meeting data exists yet (that meeting hasn't occurred); could not find the Fed's December SEP/dot plot (not yet published) or any FOMC member statement explicitly committing to a December hike as opposed to "data dependent" language.

YES means: the FOMC's statement following its December 8-9, 2026 meeting shows the upper bound of the federal funds target range raised by 25 bps (from the current 4.00% upper bound) to 4.25%. If the Committee instead holds, cuts, or delivers any amount that rounds to something other than a 25-bp increase, the market resolves NO — and because the question is pinned strictly to the December statement, a hike delayed into January 2027 or later also resolves NO. - [2026-09-29] A sitting voting FOMC member with outsized influence, New York Fed President John Williams, said explicitly "with the policy action we took at our September meeting, there is no need for urgency," and that watching more data "should provide greater clarity" before any further move — a direct, on-the-record case for skipping back-to-back hikes. https://ca.finance.yahoo.com/news/feds-williams-sees-no-urgency-180056308.html - [2026-09-30] Reuters reported that following Williams' remarks, "traders quickly paring what had been heavy bets for an October rate hike" and repricing toward "a single interest-rate hike this year," underscoring that even the bullish case for December assumes at most one hike, not an escalating tightening cycle. https://www.aol.com/articles/feds-williams-sees-no-urgency-180056000.html - [2026-09-30] The same reporting noted Fed Chair Kevin Warsh "said nothing about his own rate-path expectations" after Williams' dovish-leaning comments, leaving genuine committee-level ambiguity about whether December delivers the signaled hike or another hold. https://www.aol.com/articles/feds-williams-sees-no-urgency-180056000.html - [2026-10-02] Cross-venue prediction-market data (Kalshi/Polymarket, aggregated) puts the December 9 hike probability at only 69-72%, implying roughly 28-31% odds the Fed does NOT deliver a 25bp hike at that meeting — a meaningful "no" tail, not a near-certainty. https://defirate.com/prediction-markets/fed-decision-odds/ - [2026-10-01] A separate CME FedWatch-based read (fxstreet) showed the market "pricing a Fed pause" scenario had briefly dominated October expectations before swinging back to December, illustrating how quickly sentiment on any single meeting (including December) can reverse on data surprises. https://fxstreet.com/news/gold-recovers-above-4-150-as-us-yields-retreat-ahead-of-us-september-jobs-data-202610012349 - [2026-10-02] September payroll growth was expected to slow sharply to roughly 84,000-94,000 (from August's 162,000) with unemployment steady at 4.1% for a third straight month — an unspectacular, "low-hire, low-fire" labor report that gives the Committee no urgent tightening trigger. https://www.cnn.com/2026/10/02/economy/us-jobs-report-september-final - [2026-09-01] Congress's continuing resolution funds the government only "through early December," with a related grant-rule deadline of Dec. 11 — just after the Dec 8-9 FOMC meeting — reviving shutdown/data-disruption risk right as the Committee would need clean data to justify a second hike. https://www.edweek.org/policy-politics/averting-a-shutdown-congress-punts-federal-spending-decisions-to-december/2026/09 - [2026-10-01] Minneapolis Fed's Kashkari, despite favoring more hikes, said he is "unsure" whether action is needed "this month," reflecting a committee that is leaning hawkish in aggregate but remains split member-by-member on timing — a pattern similar to July 2026, when the Committee held despite three dissents favoring a hike. https://investing.com/news/economy-news/feds-kashkari-expects-more-rate-hikes-unsure-on-need-to-act-this-month-4928045 - [2026-10-02] The status-quo-bias precedent is concrete: the FOMC held rates through the entirety of 2025's late cuts into mid-2026 before finally hiking in September, showing the Committee's bar for actually moving (versus merely signaling) has repeatedly been higher than market chatter suggested in real time. https://www.kiplinger.com/investing/economy/what-to-expect-from-the-september-jobs-report BOTTOM LINE: Even with the Fed's own September dot plot and several hawkish voices pointing to one more 2026 hike, an influential voting member (Williams) has explicitly argued against urgency, labor data remains unspectacular rather than alarming, cross-venue markets still price a non-trivial ~28-31% chance of no hike in December, and a fresh government-funding deadline sitting right next to the meeting date revives the kind of data-disruption/inertia dynamics that have previously kept the Committee on hold longer than expected. NOT FOUND: No post-October-28-meeting data (that meeting has not occurred yet) to show whether a hike already happened in October, which would materially change December's setup; no primary Fed or CME source (beyond third-party trackers) giving an authoritative, non-stale December-specific probability as of October 2, 2026.