Another Fed rate hike in 2026?

The central question is whether the Fed will deliver at least one more increase after the September 2026 move and before the December meeting concludes. The recent evidence still leaves that outcome very much alive: the Fed already resumed hiking in September, several officials have said additional tightening remains possible or even likely, and the updated policy path from the September meeting reportedly pointed to one more hike by year-end. That means the baseline policy bias is not neutral; it is still tilted toward at least one more tightening step unless incoming data clearly improve enough to remove pressure to act.

At the same time, the timing matters a lot, and the latest tone from policymakers has shifted toward caution rather than urgency. John Williams’ remarks that there is no need to rush, combined with weaker labor data and softer inflation prints, make an October move look unlikely and place the burden on December. That reduces the practical probability somewhat because the market has to survive two more data cycles without a meaningful cooling in the outlook. If inflation remains sticky or growth re-accelerates, the Fed has a clear rationale to hike again; if the labor market weakens further or inflation continues easing, the Fed may prefer to hold and preserve flexibility.

From a market-pricing perspective, the 72% Yes price implies a fairly strong expectation that the Fed will move again, but the repricing after softer data suggests that confidence has already come down from earlier in the summer. The main positive for Yes is that policymakers still appear willing to tighten if the economy behaves as expected, and the most recent official guidance has not ruled out another move. The main negative is that the Fed has repeatedly emphasized data dependence, and the interval until the December meeting leaves enough time for developments to undermine the case for another hike. On balance, the setup still favors Yes, but not by as much as the market currently prices in.