Fed Hikes 25 Basis Points, Projects Another Hike in 2026: Do Prediction Markets Agree?
The Federal Reserve delivered the quarter-point rate hike Wall Street expected Wednesday. But its new projections suggest the Fed isn’t done: 16 of 18 policymakers see at least one more increase this year. The Fed unanimously raised its target rate to 3.75%-4%, its first increase since 2023. Median Projection Implies One More Hike In June, just six of the Fed’s policymakers projected two or more hikes in 2026. After Wednesday’s increase, 16 of 18 see at least one more before year-end, The median projection puts rates at 4%-4.25% at year-end, implying one more quarter-point hike, before holding at that level through the end of 2027. The Fed also raised its 2026 inflation forecast to 3.7% from 3.6% and GDP growth to 2.3% from 2.2%, while lowering its unemployment estimate to 4.1% from 4.3%. Officials dropped June’s reference to inflation reflecting “supply shocks,” a change Oil extended its decline after the Fed decision, with West Texas Intermediate down about 3%. Crude was already under pressure from increased Saudi shipments via Oman and softer U.S. inventory data, and the prospect of high
The Federal Reserve delivered the quarter-point rate hike Wall Street expected Wednesday. But its new projections suggest the Fed isn’t done: 16 of 18 policymakers see at least one more increase this year. 75%-4%, its first increase since 2023. Median Projection Implies One More Hike In June, just six of the Fed’s policymakers projected two or more hikes in 2026.
25% at year-end, implying one more quarter-point hike, before holding at that level through the end of 2027. 3%. Officials dropped June’s reference to inflation reflecting “supply shocks,” a change Oil extended its decline after the Fed decision, with West Texas Intermediate down about 3%. S.
inventory data, and the prospect of higher rates likely added to the selling. Stocks Hold Gains, Yields Slip Before the decision, JPMorgan Chase & Co. 25%-1% if the Fed signaled rates would stay higher for longer. The Fed’s new projections pointed in that direction, with most policymakers expecting another hike this year.
Stocks nevertheless held their gains. 8%. Treasury yields also moved lower. 64%.
The initial reaction suggests investors took the prospect of another hike more calmly than JPMorgan’s higher-for-longer scenario implied. Traders Lean Toward a December Hike Polymarket traders favor a pause in October followed by another increase later this year. 2 million traded. The December market put a quarter-point hike at 67% Wednesday afternoon, up from 57% in ’s pre-decision preview, with roughly $900,000 traded.
m. ET. Investors will be watching whether he reinforces the signal for another hike this year. Image: Shutterstock Read Also: Gas Prices Fuel a Hybrid Boom: Why Can't GM Cash In on It?