Will the upper bound of the federal funds rate be above 4.00% following the Fed's Dec 8, 2027 meeting?

- [2026-09-16] The FOMC voted 12-0 to raise the target range 25bp to 3.75%–4.00%. This was the first hike since 2023. The upper bound is now exactly 4.00%, so Yes needs at least one more net hike by the Dec 8, 2027 decision. Sources: https://www.atlantafed.org/news-and-events/2026/09/16/fomc-statement ; https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/fixed-income/fixed-income-perspectives/fomc-statement-september-2026/ - [2026-09-16] The September dot plot (Chair Warsh submitted no dot) had a median of 4.1% for end-2026, which implies one more hike. The 2027 median was also 4.1%, i.e. a 4.00–4.25% range, and the 2028 median was 3.9%. Of the 2027 dots, 14 sat at 4.00–4.25% or 4.25–4.50%, and four showed cuts. Sources: https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot ; https://www.raisin.com/en-us/news/fed-decision-dot-plot-breakdown-september-2026/ ; https://www.lordabbett.com/en-us/financial-advisor/insights/markets-and-economy/2026/september-fed-meeting-from-signals-to-action.html - [2026-10-13] NY Fed's Williams (FOMC vice chair) said one more hike may be appropriate in 2026 but he sees no need for increases in 2027. He expects inflation near 2% in 2027. Boston's Collins backs a further hike by year-end, and Richmond's Barkin called inflation "enduring" and said acting makes sense. Source (fetched): https://investinglive.com/central-banks/icymi-three-fed-officials-signal-inflation-fight-continues-williams-sees-no-2027-hike/ - [2026-10-12/13] Bloomberg reported on Oct 12 that markets priced roughly three more 25bp hikes through the end of 2027. That is well above the Fed's own projections. Per roic.ai, markets priced a December hike plus two more in 2027. Source: https://www.roic.ai/news/feds-williams-signals-one-more-hike-in-2026-but-sees-no-further-increases-in-2027-10-13-2026 - [2026-10-14] September CPI was hot: 3.7% y/y and 0.6% m/m, against a 3.6% y/y consensus. Core was 2.6% y/y and 0.3% m/m. Oil is elevated because of the Iran war that began Feb 28. CME FedWatch odds of an Oct 28 hike rose from 22.1% on Oct 13 to 37.1% on Oct 14, and "no change" fell to 62.9%. Source (fetched): https://en.fnnews.com/news/202610150304233094 - [2026-10-14] A CME Group post said October hike expectations jumped to 50% post-CPI, from 22% a day earlier. A separate tracker, as of Oct 14, showed a 79.3% hold probability, which is probably pre-CPI. Sources: https://x.com/Interest_Rates/status/2110382424961994983 ; https://growbeansprout.com/tools/fedwatch - [2026-09-29] Forbes reported that fixed-income markets priced hikes at both the October and December 2026 meetings, taking the rate to 4.00–4.25% or higher. If October is skipped, a December hike was seen as almost certain. Source: https://www.forbes.com/sites/simonmoore/2026/09/29/what-to-expect-from-interest-rates-for-the-rest-of-2026/ - [2026-09-16] Warsh gave limited forward guidance and said the FOMC decided that the standard of inflation clearly moving to target "has not been satisfied". He has dropped the dot plot and explicit guidance. The committee was unanimous in September, after three members favored a hike in July. Sources: https://www.cnbc.com/2026/09/16/fed-rate-decision-september-2026.html ; https://www.cnbc.com/2026/09/24/feds-williams-another-rate-hike-by-year-end.html - [2026-10-15] The upcoming schedule: Oct 27–28 (decision Oct 28), Dec 8–9 2026 (SEP), then 2027 meetings on Jan 26–27, Mar 16–17, Apr 27–28, Jun 8–9, Jul 27–28, Sep 14–15 and Oct 26–27. The target meeting is Dec 7–8, 2027, with the decision on Dec 8 at 2:00 pm ET and an SEP. That leaves 8 meetings before the target meeting and 9 including it. Sources: https://www.smartcalendars.ai/en/feeds/fed-fomc-meeting-calendar ; https://tools.tnaado.ca/us/fomc-meeting-dates-fed-funds-history/ - [2026-10-14] US midterm elections are on Nov 3. Gas has been above $4 for a record 158 days (Newsweek, via an investingLive ticker). The Fed's policy rate is the effective (EFFR) 3.88% midpoint, per rateprobability.com as of Oct 14. Source: https://rateprobability.com/fed - [2026-06-17 to 2026-09-16] The dot plot's 2027 median rose from 3.1% in March to 3.6% in June and 4.1% in September. The long-run median is 3.25%. Source: https://www.regardsofwallstreet.com/news/fed-dot-plot-september-2026-preview BOTTOM LINE: The rate sits at the 4.00% threshold, and the Fed's own median (4.1% at end-2027), futures pricing (about three more hikes by end-2027) and the hot September CPI all point to a higher upper bound than 4.00% at Dec 2027. The downside risks are Williams's view that inflation fades with no 2027 hikes, a possible reversal if the oil shock fades, and political pressure from the Trump White House. Most likely Yes requires only that the 25bp hike expected by Dec 2026 is not later fully reversed. NOT FOUND: The current text of federalreserve.gov's implementation note (the fetch was blocked); Fed funds futures or FedWatch probabilities for the Dec 2027 meeting specifically; any official Fed statement after Sep 16 other than the minutes.

- [2026-10-15] The target range is 3.75–4.00%, so the upper bound is exactly 4.00% today. The question resolves Yes only if the Fed ends up above that, which means the range must be at least 4.00–4.25% after the Dec 8, 2027 meeting (the date as listed in market tools). <https://www.ironcladresearch.com/federal-funds-rate> - [2026-09-16] The FOMC voted 12-0 to raise the range by 25bp. It followed five straight meetings at 3.50–3.75%, the range set in December 2025. <https://coruzant.com/fintech/federal-reserve-decisions/> - [2026-09-16] The Sept SEP median for the fed funds rate is 4.1% at end-2026 and still 4.1% at end-2027, then 3.9% in 2028. That 4.1% is a midpoint, which equals the 4.00–4.25% range, so the median sits one notch above the strike. <https://fredblog.stlouisfed.org/2026/09/fomc-summary-of-economic-projections-september-2026/> - [2026-09-16] Dispersion for 2027 is wide. Per Schwab, all but four voters expected higher rates than now by end-2027, more expected two hikes than one, and three expected one cut while one expected several cuts . JPMorgan's summary says sixteen of eighteen expect one more hike this year and four expect two . <https://www.schwab.com/learn/story/fomc-meeting> - [2026-10-14] CME FedWatch (via BeInCrypto/Yahoo) puts the Dec 8, 2027 most-likely range at 4.50–4.75% (31.7%). Futures price 93% odds that rates end 2027 at least 50bp higher. A single 25bp hike, ending 2027 at 4.00–4.25%, carries 6.3%. Staying at or below 4.00% therefore looks like a small residual in this pricing, perhaps about 1% on one earlier Investing.com snapshot. <https://finance.yahoo.com/economy/policy/articles/one-more-hike-then-done-094422492.html> - [2026-09-19 approx] An Investing.com FedWatch snapshot, which I could not date exactly (page marked 26 days old), showed the Dec 2027 probability of 3.75–4.00% at about 0.9%. Most of the probability mass sat in the 4.25–5.00% bands. This is the same direction as the 10/14 data. <https://www.investing.com/central-banks/fed-rate-monitor> - [2026-10-14] NY Fed's Williams sees one more hike this year and no reason to need more. Hawks Hammack and Logan see more than one further hike. Even Williams's path would leave the range at 4.00–4.25% or higher. Cuts below 4.00% by Dec 2027 would require a reversal of 2+ hikes. <https://finance.yahoo.com/economy/policy/articles/one-more-hike-then-done-094422492.html> - [2026-10-09] The market gives about a 16–18% chance of an October hike and about 75–85% of a hike by December 2026. The chair is Kevin Warsh. <https://admiralmarkets.com/analytics/traders-blog/fed-rate-decision-october-2026> - [2026-09 / 2026-06] Sell-side and survey views lean dovish against the market. Morningstar (about Sept 2026) expects two cuts in H2 2027 and 2.50–2.75% by end-2028 , and says its view is 175bp below the market's. Even so, two cuts from 4.25–4.50% would leave the range at 3.75–4.00%, or above that if they hike less. The Bloomberg survey from June (before the hike) projected 3.00–3.25% by Dec 2027, and Goldman's June forecast was the same. These forecasts predate the September hike and have a poor 2026 record, having expected cuts that did not happen. <https://www.morningstar.com/economy/whats-ahead-2027-beyond-inflation-fed-rate-cuts-more> - [2026-06-12] Bloomberg survey of 35 economists: median cuts in June and December 2027, ending at 3–3.25%. This is stale, since it was taken before the hike and the policy shift. <https://www.bloomberg.com/news/articles/2026-06-12/economists-push-rate-cut-expectations-into-2027-survey> - [Base rate] The Fed rarely changes direction smoothly, and its 14-month-ahead rate paths have large errors. In this cycle, dots and surveys in March 2026 expected cuts, and by September the median had moved up by 0.5pp for 2027. The shift from -50bp to +25bp of median 2027 policy in six months shows how large the error band is. This is general knowledge and my own comparison, not a sourced statistic. The Sept SEP data gives the dot comparison. <https://fredblog.stlouisfed.org/2026/09/fomc-summary-of-economic-projections-september-2026/> BOTTOM LINE: The outside view favors Yes. The current upper bound is exactly at the 4.00% strike, and both the FOMC median (4.1% for end-2027) and fed funds futures (most likely 4.50–4.75%) sit above it. Staying at or below 4.00% needs a reversal of the September hike, which only the dovish minority of the FOMC and a few sell-side houses expect, and their forecasts have been repeatedly wrong this year. NOT FOUND: Kalshi's or other venues' prediction-market odds for this contract (not searched, per instructions); a precise historical hit-rate for 14-month-ahead FedWatch or dot-plot accuracy; the full dated Dec 2027 FedWatch probability table.

YES means: the upper bound of the fed funds target range published by the Fed is above 4.00% (range 4.00–4.25% or higher) after the Dec 8, 2027 meeting. - [2026-10-07] I read the Fed's Sept 15–16 minutes on federalreserve.gov. They record that all participants backed the hike to 3¾–4%. The primary credit rate was set at 4.0%. Almost all participants saw inflation risks tilted to the upside, and risks to the labor market as now "broadly balanced". <https://www.federalreserve.gov/monetarypolicy/fomcminutes20260916.htm> - [2026-10-07] The same minutes say many participants judged a higher rate path "prudent on risk-management grounds". They described it as insurance against inflation staying persistently above target. That argues for keeping rates high, not reversing the hike. Per CNBC, this was the committee's wording. <https://www.cnbc.com/2026/10/07/fed-officials-see-another-hike-coming-but-no-sign-as-to-when-minutes-show.html> - [2026-10-07] Reported from the minutes (not read in full on a fetched page): several participants said the current rate is not restrictive, or only mildly so. The staff raised its inflation forecast for 2026–28 and sees a return to 2% only in 2029. A cut below 4.00% would then need policy to be restrictive enough to justify easing. <https://www.coingabbar.com/en/fomc-meeting-minutes-inflation-fed-rate-hike-september-2026> - [2026-10-14] I read the BLS and CNBC releases. September CPI was 3.7% y/y, and gasoline rose 9.1% m/m. Core was 0.3% m/m for a second month. Shelter rose 0.4%, and Axios reports a 3.4% annualized three-month core rate, up from 2% in August. Axios also says supercore was hot. Reuters says the report shows price pressures broadening beyond energy. This is the mechanism for the path to Yes: second-round effects keep inflation above target past 2027. <https://www.bls.gov/news.release/cpi.nr0.htm> ; <https://www.axios.com/2026/10/14/inflation-warning-sign-cpi> ; <https://www.kitco.com/news/off-the-wire/2026-10-14/us-inflation-heats-september-fed-rate-hike-month-back-table> - [2026-10-14] Reuters cites CME FedWatch at roughly 52% for an Oct 28 hike after the CPI, up from about 22% before it. A hike in October or December would put the upper bound at 4.25% before 2027 even starts. Zandi said the CPI supports continued hikes. Wells Fargo Investment Institute expects hikes between now and spring 2027. <https://www.kitco.com/news/off-the-wire/2026-10-14/us-inflation-heats-september-fed-rate-hike-month-back-table> ; <https://cnbc.com/2026/10/14/cpi-inflation-breakdown-september-2026.html> - [2026-10-01] Dallas Fed's Logan, a 2026 voter, said the range needs to rise "50 basis points or more" more. She said inflation will not go much below 2.5% without hikes. She said a few more hikes would only undo last fall's 75bp of cuts. Hammack (a 2026 voter) also wants more tightening. She, Logan and Kashkari dissented for a hike in July. <https://www.investing.com/news/economy-news/feds-logan-calls-for-50-bps-or-more-in-rate-hikes-4928682> ; <https://www.roic.ai/news/feds-hammack-urges-more-rate-hikes-as-inflation-risks-persist-10-12-2026> - [2026-09-16] CBS and SGH's Tim Duy say Warsh was more hawkish at the press conference than the dots, and signalled willingness to hike more. Morningstar notes the median SEP excludes Warsh's view. It also says he "may be pushing for higher rates". The chair is a hawk who has dropped forward guidance, so he has no commitment to cut. <https://www.cbsnews.com/news/fed-rate-hike-warsh-trump-inflation/> ; <https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027> - [2026-09-16] Counting 2027 dots: Schwab says eight dots show another 25bp hike in 2027, and Facet says six show cuts. Schwab notes dots implying a second 2026 hike. The committee median is thus at 4.1% for end-2027 with a larger hiking tail than cutting tail. <https://www.schwab.com/learn/story/fomc-meeting> ; <https://facet.com/investing/september-2026-fed-rate-hike-impact/> - [2026-09/10] Even the dovish camp does not clearly get below 4.00%. Williams's path ends at 4.00–4.25% with no 2027 move. Morningstar sees cuts in 2027, but says markets price four hikes by mid-2027. Its 2027 cuts start from a higher base. Its dovish case relies on unemployment averaging 4.6% by 2028, against the Fed's 4.1%. <https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027> - [2026-10-14] A lower oil price is the main NO route. RBC's Reid calls inflation an "oil story" for "a few more months". CNBC notes crude is still below its pre-war pace through Hormuz. The Fed stated it will tolerate an energy shock only if core cools, and core is not cooling. <https://cnbc.com/2026/10/14/cpi-inflation-breakdown-september-2026.html> BOTTOM LINE: The single most likely path to Yes is one more hike by Dec 2026 (which Williams, Collins, the minutes' majority and the CPI-driven odds all support). The Fed then holds at 4.00–4.25% or higher through Dec 2027, because core inflation is re-accelerating, the chair is hawkish and the Fed has no stated intention to cut. Yes fails only if the oil shock fades and the Fed reverses all of the hikes, which needs the labor market to weaken materially. NOT FOUND: the Dec 2027 FedWatch table on a primary CME page; any Fed official explicitly projecting cuts to ≤4.00% by end-2027 in recent statements; Warsh remarks after Sept 16.

YES means: the upper bound of the Fed's target range, as published on federalreserve.gov, is 4.25% or higher after the Dec 8, 2027 meeting. At least one net 25bp hike from today's 3.75–4.00% is needed. NO means the range is 3.75–4.00% or lower. - [2026-09-16] Morningstar's Preston Caldwell (fetched) expects the Fed to cut twice in 2027 and four more times in 2028. He treats this as undoing "two hikes in 2026". His premise is that the 2026 hikes are reversed. Under that premise, Dec 2027 would be at 3.75–4.00% or lower, which is NO. The weak links: this path needs two hikes by Dec 2026, and Morningstar projects unemployment averaging 4.6% by 2028 against the Fed's 4.1%. https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027 - [2026-09-16] The same piece says the Sept SEP median implied two hikes in 2026 and none after. Morningstar notes that Warsh submitted no dot. The September dots were a comparatively dovish read versus market pricing of four hikes by mid-2027. The Fed's own path is much less aggressive than futures. A NO outcome only needs the committee to follow its median and then trim, not the market path. https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027 - [2026-10-13] Williams (a permanent FOMC voter) told Bloomberg he sees inflation near 2% for 2027 as a whole. He expects tariffs to be "totally in the rearview mirror". He also expects energy prices not to add to inflation next year. He called the economy "not overheating". He sees no need for a 2027 hike, and other officials were reported to echo the lack of urgency for more tightening. The stated mechanism for NO is that disinflation lets the Fed hold at 4.00–4.25% and then cut by late 2027. Investing.com returned 403 on fetch, so this rests on the search snippet. https://investing.com/news/economy-news/feds-williams-currently-sees-no-need-for-rate-hike-in-2027-bloomberg-news-reports-4947379 - [2026-09-16] Schwab (via search snippet) counts 6 dots for 2027 cuts, with one dot at as many as four cuts. Facet reports that 8 members see another 2027 hike. Cuts below the 4.00–4.25% range need only a modest tail of the committee. The dot plot is split, not unanimous for hikes. https://facet.com/investing/september-2026-fed-rate-hike/ - [2026-10-08] The minutes (published Oct 7) say "several" participants viewed policy as "not restrictive or only mildly restrictive". The hike was framed as risk management or insurance against persistent inflation. Hawkish framing is therefore about insurance, which can be unwound if the shocks fade. TD Economics says the minutes confirm a tightening bias, but that bias is stated for "year end" only. Nothing about 2027 is committed. https://www.scotsmanguide.com/news/fed-policymakers-saw-multiple-2026-rate-hikes-as-likely-september-fomc-minutes-show/ - [2026-10-12] Oil is highly headline-driven. Brent fell to about $103 on an unconfirmed Trump claim of a Russia–Ukraine energy ceasefire. Brent had dropped to around $70 by July 1 after an April ceasefire and a Hormuz reopening, before rebounding to over $100 (per Wikipedia). The Wikipedia page is flagged as needing updates. Oil has reversed by roughly 30% within a quarter before, so a Hormuz settlement before Dec 2027 is plausible and is the cleanest route to NO. https://www.cbsnews.com/live-updates/iran-war-trump-us-oil-prices-yemen-red-sea-houthis-bab-el-mandeb/ - [2026-10-08] Bloomberg notes oil traders now focus on cargo movements rather than Trump's rhetoric. Volatility has shrunk with fewer strikes on energy infrastructure. A stable supply shock that does not escalate would be consistent with the Fed's "one more and done" view. https://www.bloomberg.com/graphics/2026-trump-oil-reactions/ - [2026-09-16] Trump demanded rates of "1% or less" hours after the hike. He earlier threatened trade cutoffs if the Fed does not cut, and also said he had told Warsh to vote for the hike. Political pressure is persistent, with midterms on Nov 3. This pushes the reaction function toward earlier cuts once inflation prints soften. It has not moved votes so far: the hike was 12-0. https://www.cnbc.com/2026/09/16/trump-fed-interest-rate-warsh.html - [2026-06-12] Bloomberg's survey of economists, taken before the hike, expected cuts in 2027. Goldman (about June) expected cuts in June and Dec 2027. Goldman's rationale was that wage growth runs about 0.5pp below a 2%-compatible pace and rent indicators are low. Goldman also expected inflation near 2% in 2027 if no new supply shocks. These are pre-hike views and have been wrong in 2026. https://www.goldmansachs.com/insights/articles/why-the-fed-is-unlikely-to-cut-rates-this-year - [2026-09-16] Resolution technicalities: the contract needs the upper bound strictly greater than 4.00%. A hold at 3.75–4.00%, or a single hike followed by a single cut, resolves NO. Only one hike and one reversal by Dec 8, 2027 yields 4.00% exactly. The path need not be dovish for NO, only net hikes ≤ 0. The Dec 8 meeting itself can also be a cut, and the market expires on the first 2:05 PM ET after the statement. The 4.00% bound sits exactly on the current setting. https://www.schwab.com/learn/story/fomc-meeting - [2026-10-14] Morningstar's economist (Preston Caldwell) published "The Bond Selloff Story Has Shifted" on Oct 14, and "Actually, AI Is Boosting Interest Rates, Not Inflation" on Sept 27. The thesis is that long yields rise because of AI capital demand, not because of inflation. If so, hikes would not be needed to anchor inflation. I could not read either article. The titles come from a fetched Morningstar page's author list, and the content is unverified. https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027 - [2026-09-16] Status-quo inertia argues against Yes at the margin. The committee held at 3.50–3.75% for five meetings after December 2025. The Sept dots show a 2027 median that implies no change after the 2026 hikes. If the Fed stops at 4.00–4.25% and cuts once in 2027, the bound is 4.00% and resolves NO. https://fortune.com/2026/09/16/fed-rate-hike-trump-kevin-warsh/ BOTTOM LINE: The strongest NO case rests on three things. The Fed's own median is flat after 2026, so one hike followed by one cut gives exactly 4.00%. Williams, a permanent voter, expects 2027 disinflation and no hikes. The oil shock has already reversed sharply once. Against this, September CPI was hot, the hike was unanimous, and markets price hikes through 2027. NOT FOUND: The full text of the 2027 Fed projections of voters who favor cuts. Any official FOMC guidance on 2027. Evidence that a 2027 cut is more than a minority view among current officials. The Oct 14 and Sept 27 Morningstar articles. A working Investing.com fetch of the Williams article.