Will the upper bound of the target range for the federal funds rate in effect at 11:59 PM ET on December 31, 2027 be above 3.75%?

- [2026-09-16] The FOMC raised the federal funds target range by 25 bp to **3.75%–4.00%**, its first hike since 2023, under new Chair Kevin Warsh, in a unanimous 12–0 vote, citing elevated inflation and solid growth. The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. Source: https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm - [2026-10-06] The federal funds target range currently in effect is **3.75% (lower) to 4.00% (upper)**, per Federal Reserve data series updated daily. Federal Funds Target Range - Upper Limit (DFEDTARU) 2026-10-06: 4.00 | Percent, Not Seasonally Adjusted | Daily, 7-Day Source: https://fred.stlouisfed.org/series/DFEDTARU - [2026-09-16] In the accompanying Summary of Economic Projections, the median participant now expects the fed funds rate to hike an additional 25bps ending 2026 at 4.1%, no change to the policy rate in 2027, and rate cuts in 2028 and 2029, to 3.9% and 3.6% respectively. Source: https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/fixed-income/fixed-income-perspectives/fomc-statement-september-2026/ - [2026-09-16] Sixteen of eighteen participants expect one additional rate hike this year, while four participants project two additional hikes. The dot plot for 2027 showed all but four voters expecting higher rates than now by the end of next year, with more expecting two hikes than one; three expected one cut and one expected several cuts by year-end 2027. Source: https://www.schwab.com/learn/story/fomc-meeting - [2026-09-16] The median projection for the federal funds rate at the end of this year is 4.1%, where it remains in 2027 before falling to 3.9% by year-end 2028 — higher than June's projections by 0.3 points this year and 0.5 points in both 2027 and 2028. Source: https://fred.stlouisfed.org/blog/2026/09/fomc-summary-of-economic-projections-september-2026/ - [2026-09-16] Translated into target-range terms, the September Fed dot plot projected a target range of the fed funds rate to be 4.00% to 4.25% at yearend 2026 and 2027. Source: https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot - [2026-10-02] Market-based (futures-implied) pricing shows the effective fed funds rate rising to about 4.1% by January and reaching roughly 4.8% by October 2027, pointing to expectations that policy will remain restrictive , with implied rates holding near 4.7% through 2031 . Source: https://streetstats.finance/rates/fedfunds - [2026-10-07] Upcoming FOMC meetings before Dec 31, 2027 include Oct 27–28 2026, Dec 8–9 2026, and the full 2027 calendar: January 26–27, March 16–17, April 27–28, June 8–9, July 27–28, September 14–15, October 26–27 and December 7–8 , with the December 7–8, 2027 meeting (including a new SEP/dot plot) being the last decision point before year-end. Source: https://tools.tnaado.ca/us/fomc-meeting-dates-fed-funds-history/ - [2026-10-07] 2027 meeting dates remain tentative; the Federal Reserve publishes them in advance as a tentative calendar, and each date is confirmed at the meeting immediately preceding it, though in practice the published schedule almost never changes. Source: https://eco3min.fr/en/fomc-meeting-calendar/ - [2026-09-16 context] This hike reversed a prior cutting cycle: the range had been at 3.50%–3.75% since a December 2025 cut, and the Fed's last movement occurred in December 2025 when the Fed lowered the target range of the fed funds rate to 3.50% to 3.75%. Source: https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot NOT FOUND: Could not find CME FedWatch-style futures-implied probabilities specifically for the December 2027 FOMC meeting (most third-party trackers only project point estimates of the effective rate out to 2027–2031, not a probability distribution over target ranges for that specific date). Could not find any Fed communication suggesting rate cuts large enough to bring the upper bound back to or below 3.75% before end-2027. BOTTOM LINE: The federal funds target range is already at 3.75%–4.00% (upper bound already above 3.75%) as of October 2026, following a September 2026 hike, and both the Fed's own September 2026 dot plot (median path flat at ~4.1% through 2027, implying a 4.00–4.25% range) and market-implied futures pricing (effective rate near 4.7–4.8% by late 2027) point to the upper bound remaining above 3.75% through December 31, 2027, with any meaningful easing not expected until 2028–2029.

- [2026-10-06] The federal funds target range currently stands at 3.75%–4.00% (upper bound 4.00%), already above the 3.75% threshold in the question, following a 25bp hike on 2026-09-16, the Fed's first hike since 2023. Source: FRED series confirms upper limit 4.00% as of 2026-10-06. https://fred.stlouisfed.org/series/DFEDTARU - [2026-09-16] Per the FOMC's official statement, "The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate." https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm - [2026-09-21] The Fed's own Summary of Economic Projections (SEP), the closest thing to an "official forecast" reference class, shows the median projection for the federal funds rate at the end of this year is 4.1%, where it remains in 2027 before falling to 3.9% by year-end 2028, with these projections higher than June's by 0.3 points in 2026 and 0.5 points in both 2027 and 2028 . This median year-end-2027 rate (4.1%) is a full 35bp above the 3.75% threshold. https://fred.stlouisfed.org/blog/2026/09/fomc-summary-of-economic-projections-september-2026/ - [2026-09-18] Reporting on the same SEP noted sixteen policymakers expect at least one more increase before year-end, with the median projection for the funds rate sitting near 4.1% for both 2026 and 2027 , erasing earlier expectations of 2027 cuts. https://www.forbes.com/sites/jasonkirsch/2026/10/06/the-fed-just-hiked-for-the-first-time-since-2023-heres-what-it-means-for-your-portfolio/ - [2026-09-16] Dot-plot dispersion analysis found 12 of 18 meeting participants projected the year-end-2026 target range a quarter-point higher than the prevailing 3.75%–4.00% range, while for 2027 there were four outliers projecting cuts but the other fourteen clustered higher , indicating a strong hawkish majority for 2027 as well. https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot - [2026-09-16] Separate coverage confirms the neutral-rate view has risen: the September 2026 dot plot showed more officials seeking to keep rates elevated in the near term, with policymakers expecting the fed funds rate to gradually decline toward a longer-run level of approximately 3.25% — implying any descent toward/below 3.75% is seen as a multi-year (post-2027) process, not imminent. https://www.ishares.com/us/insights/fed-outlook-2026-interest-rate-forecast - [~2026-09-26] Futures-market-derived probabilities (Investing.com Fed Rate Monitor, captured ~70 days before 2026-10-07) showed non-trivial pricing of a 4.00%–4.25% range persisting into the Jan 27, 2027 and Dec 8, 2027 meetings, consistent with markets not pricing cuts back to/below 3.75% by end-2027. https://in.investing.com/central-banks/fed-rate-monitor - [2026-09-23] CME FedWatch-based trackers show markets currently pricing further tightening in the near term, e.g., one snapshot found a 54.2% probability the Fed raises rates 25bp at the October meeting versus 45.8% for a hold, with the probability of unchanged rates by December dropping to just 10.8% — i.e., markets expect the rate to go higher, not lower, deepening the gap above 3.75% rather than closing it. https://phemex.com/news/article/cme-fedwatch-542-probability-of-rate-hike-at-october-meeting-97512 - [2026-09-30] A separate FedWatch-derived snapshot similarly found markets pricing a significantly higher likelihood of tightening by year end, with only a 10% probability of rates remaining unchanged through year-end, versus a 51.8% chance of a cumulative 25bp hike and 38.2% chance of a cumulative 50bp hike . https://phemex.com/news/article/cme-fedwatch-529-chance-fed-holds-rates-in-october-after-pce-data-98336 - [2026-09-16] Context on the regime shift: this is the Fed's first increase since July 2023 , reversing the 2024–2025 cutting cycle; the base-rate "reference class" here is no longer a cutting cycle approaching a cap, but an active hiking cycle that has already pushed the upper bound to 4.00%, above the question's 3.75% strike, with the Fed's own median outlook, SEP dispersion, and futures pricing all pointing to the rate staying at or above that level through end-2027. - [historical] As an outside-view caveat: FOMC dot-plot projections for horizons 12–15 months out have historically had material forecast error (often tens to 100+ bps) in either direction depending on inflation/growth surprises, so the 4.1% 2027 median should be read as the Fed's current best guess, not a guarantee—though a reversal large enough to bring the upper bound back to/below 3.75% by end-2027 would require roughly 25–50bp of net cuts relative to current policy, a nontrivial but not unprecedented swing within 15 months. BOTTOM LINE: The reference class has flipped from "will the Fed cut enough" to "will the Fed cut enough to undo an active hiking cycle": the rate is already above the 3.75% threshold (upper bound 4.00% as of Oct 2026), the Fed's own median 2027 projection (~4.1%) and current futures pricing both point to the rate staying above 3.75% through year-end 2027, so the historical/current-forecast base rate strongly favors YES absent a significant and currently unsignaled dovish reversal. NOT FOUND: No long-run historical frequency study of "how often has the fed funds upper bound been above a specific pre-set level 15 months after a Kalshi-style market opened" was available; no direct CME FedWatch probability specifically for the December 2027 target range level (only indirect/aggregated snapshots and a dated investing.com capture) could be retrieved via primary CME source.

YES means: the upper bound of the Fed's target range in effect on 2027-12-31 is above 3.75% (i.e., the range stays at or above 3.75%–4.00%, or goes higher), as published on the Federal Reserve's official website. - [2026-10-06] The Fed voted 12-0 to lift its benchmark rate by a quarter point to a target range of 3.75% to 4% , meaning the upper bound is already 0.25pp above the question's 3.75% threshold with 15 months left before resolution — the market starts already "in the money" for YES. - [2026-09-29] Fed officials at their September meeting approved a quarter percentage point rate increase and penciled in the likelihood of another by the end of the year, with all but two of the 18 FOMC officials who provided forecasts indicating they expect at least one more move in 2026 , which would push the upper bound to 4.25% before 2027 even begins. - [2026-10-03] Prediction-market pricing (Kalshi/Polymarket, averaged) shows traders assign roughly 73% probability to at least one more hike before year-end 2026, with the December 9 meeting alone priced at about 72% for a hike — a near-majority path toward the range going higher, not lower, ahead of 2027. - [2026-10-03] Looking further out, the same meeting-by-meeting market pricing shows a 53% hike probability at the March 17, 2027 meeting, indicating markets see tightening risk persisting well into 2027, not just in 2026. - [2026-09-23] Warsh's own framing of the hike as having merely "remove[d] a dose of accommodation" signals he views policy as still insufficiently restrictive, reinforcing the case that further hikes (not cuts) are the more likely near-term path. - [2026-10-06] Inflation nowcasts remain well above target: the Cleveland Fed's nowcast put September 2026 year-over-year headline CPI at 3.60%, headline PCE at 3.56%, and core PCE at 3.02% — all far above the Fed's 2% goal, giving the Fed little data-driven reason to reverse course toward cuts before end-2027. - [2026-09-29] Fed Governor Barr reinforced the hawkish case, stating "we have been knocked off course on our progress toward our 2% goal," adding, "I don't yet see a clear trend toward a timely return to 2%" , suggesting internal support exists for keeping rates elevated or hiking further through 2027. - [2026-08-28] At Jackson Hole, Warsh stated "the numbers are more concerning. The Fed's preferred measure of inflation, the 12-month change in the PCE price index, stands at 3.7 percent, while the six-month change is 4.1 percent" , establishing the hawkish rationale that led directly to the September hike and that remains largely unresolved. - [2026-10-05] Market participants broadly do not expect a reversal of the hiking cycle soon; coverage of the Fed's inflation stance notes that "the Fed will follow up its September interest rate hike with another increase at either of its remaining meetings this year — in October or, more likely, December" , with no comparable expectation of cuts flagged for 2027 in current reporting. - [2026-10-07] The full 2027 FOMC calendar (Jan 26–27 through Dec 7–8) gives eight separate decision points where the Committee could hold or hike further before the resolution date; for the upper bound to fall back to 3.75% or below, the Fed would need to not just pause but actively reverse the current hiking cycle with net cuts — a scenario not currently signaled by any FOMC communication, speech, or market pricing found. BOTTOM LINE: The strongest YES case rests on the fact that the upper bound is already at 4.00% — above the 3.75% strike — following the September 2026 hike, backed by a hawkish Fed chair, persistently above-target inflation data (PCE/CPI near 3-3.7% y/y as of September 2026), an FOMC median 2027 projection of ~4.1%, and prediction-market pricing showing roughly 70%+ odds of at least one more 2026 hike plus meaningful hike odds extending into March 2027 — all of which point toward the range staying at or above its current level through December 2027, requiring no further Fed action for YES to resolve, only the absence of a substantial easing reversal. NOT FOUND: No CME FedWatch or prediction-market probability data specifically quoted for the December 2027 meeting or for the exact year-end-2027 target range; no official Fed communication explicitly ruling out rate cuts in 2027.

YES means: the Fed's published upper bound of the target range (or single target rate) in effect at 11:59 PM ET on Dec 31, 2027 is above 3.75%. This dimension argues the NO case — that despite the current 3.75%–4.00% range, the upper bound ends up at or below 3.75% by year-end 2027. - [2026-09-16] Pre-hike bank forecasts that remain the most bearish-on-rates data point available: Morgan Stanley's note called for **two 25bp cuts in 2027** (March and June), which — if layered onto the pre-hike 3.50%-3.75% base the note assumed — would be consistent with an upper bound at or below 3.75% by mid-2027, before any 2026 hikes are counted. https://www.thestreet.com/fed/morgan-stanley-updates-surprising-fed-rate-path-for-2027-with-two-rate-cuts-despite-bond-market-concerns-about-hikes - [~2026-06] Goldman Sachs' base case (pre-September-hike) had the Fed's "final two rate cuts in this cycle" landing in **June and December 2027**, i.e., a framework in which 2027 ends with cuts in progress rather than holds — the opposite direction needed for YES, even though GS has since had to push dates further out as data surprised hawkish. https://www.goldmansachs.com/insights/articles/why-the-fed-is-unlikely-to-cut-rates-this-year - [2026-10-02] Even hawkish JPMorgan's newest call (post-September-hike) is for **only one more 25bp hike in December 2026 and then a pause through 2027**, explicitly ruling out "extended tightening into 2027" — meaning no major forecaster is currently calling for the rate to keep climbing, so any 2027 surprise (soft inflation data, labor deterioration) has to work only through cuts, not more hikes, to flip the path below 3.75%. https://www.kucoin.com/news/flash/j-p-morgan-predicts-one-more-fed-rate-hike-in-december-before-2027-pause - [2026-03-18] The Fed's own published historical projection-error table shows the average absolute error for short-term interest-rate projections at a roughly two-year horizon is **±2.0 percentage points**, dwarfing the 35bp gap between the September 2026 median 2027 projection (4.1%) and the 3.75% strike — meaning a move of that size is well inside normal forecast-error bounds, not a tail event. https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20260318.htm - [2026-09-16] Even inside the current hawkish SEP, dispersion exists: the September 2026 dot plot showed **four of eighteen participants projecting rate cuts for 2027**, and one projecting "several cuts" by year-end 2027 — proof that a non-trivial minority of policymakers already see a path to materially lower rates within the window, a bloc that could grow if data turns. https://www.schwab.com/learn/story/fomc-meeting - [2026-09-18] Reporting on Warsh's own press conference notes he "did not participate" in submitting economic projections and told reporters doing so was "not helpful," leaving ambiguity about his own rate path — distinct from the committee's hawkish median — and he has a long public record (documented pre-confirmation) of dovish sympathies and a stated desire to shrink the balance sheet, a policy lever he has previously framed as justifying rate cuts even amid above-target inflation. https://www.nbcnews.com/business/economy/inflation-kevin-warsh-fed-fomc-meeting-rcna350411 - [2026-10-07 reporting on 2026 data] Multiple 2026 outlooks (RSM, Morgan Stanley) flagged unemployment drifting higher — RSM's baseline sees unemployment reaching **4.5%** in 2026 with a 30% downside probability of a scenario pushing it to **5% or higher** — and historically the Fed has cut quickly once labor-market deterioration becomes unambiguous, a dynamic that could reassert itself in 2027 even after the September hike. https://realeconomy.rsmus.com/rsms-u-s-outlook-for-2026-an-acceleration-in-growth/ - [2026-09-16] The regime-change precedent itself cuts both ways: the Fed delivered a cumulative **1.75-percentage-point cut from 2024–2025**, then fully reversed course with a hike within about nine months of the last cut — demonstrating the FOMC under current leadership is willing to make rapid, large directional moves (up or down) in response to shifting data, which argues a swift reversal back toward/through 3.75% is mechanically plausible inside a 14-month window if inflation data break the Fed's way. https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot - [2026-09-16] Separate September 2026 coverage notes the Fed's own longer-run dot clusters around a neutral rate near **3.25%**, confirming that the Fed's own internal reference point for "normal" policy is below the 3.75% strike — so any credible signal that inflation is converging to target could, in principle, let the Committee argue for cuts toward that neutral anchor within the resolution window. https://www.ishares.com/us/insights/fed-outlook-2026-interest-rate-forecast BOTTOM LINE: The NO case rests on forecast uncertainty (the Fed's own ±2.0pp two-year rate-projection error band), a vocal cutting-minority on the current dot plot, a chair with a dovish track record who abstained from the hawkish SEP, and precedent that this FOMC has executed large directional reversals quickly — but no mainstream bank forecast currently published after the September 2026 hike projects the upper bound falling to or below 3.75% by end-2027, making this the weaker side of the argument versus the status quo. NOT FOUND: No post-September-2026-hike bank research note explicitly forecasting the upper bound at or below 3.75% by December 2027; no CME FedWatch probability specifically for the December 2027 contract; no confirmation of any imminent Fed Board of Governors vacancy before end-2027 that would materially shift the voting majority toward cuts.