How many times will the Federal Reserve raise the federal funds rate target range during calendar year 2026?

As of September 17, 2026, the Federal Reserve has executed exactly one rate hike this calendar year. Following five consecutive holds 3 sources, the FOMC voted unanimously (12–0) on September 16 to raise the target range by 25 basis points to 3.75%–4.00% federalreserve.gov. With only two regularly scheduled meetings remaining—October 27–28 and December 8–9 federalreserve.gov—the realistic bounds of this forecast are strictly limited to 1, 2, or 3 total hikes. A fourth would require an unprecedented intermeeting move, the probability of which is negligible.

Official Federal Reserve communications strongly point to one additional hike before year-end, making two total hikes the modal outcome. The September Summary of Economic Projections (SEP) showed a median end-2026 rate of 4.1%, implying exactly one more 25bp increase from the current 3.875% midpoint federalreserve.gov. The distribution of the dot plot is distinctly hawkish: of the 18 participants, 12 penciled in one more hike, 4 projected two more, and only 2 anticipated no further action federalreserve.gov. Chair Warsh framed the September move as necessary for a timelier return to the Committee's 2 percent goal amidst resilient employment and energy-inflation pressures driven by the U.S.–Iran conflict, though he deliberately offered sparse forward guidance 3 sources.

Market pricing and sell-side consensus closely align with the SEP's median projection. Following the September decision, fed funds futures and prediction markets implied a roughly 37% probability of a hike in October and a 72%–74% probability of a hike in December kalshi.com. Overall, rate futures imply a ~90% probability of at least one more move by year-end bnnbloomberg.ca. Analysts across major brokerages—including J.P. Morgan, Goldman Sachs, Nomura, and Morgan Stanley—overwhelmingly expect exactly one more hike bnnbloomberg.ca. December is widely viewed as the more likely venue, as policymakers may prefer to assess the impact of their initial move and avoid acting at the October meeting, which falls just days before the midterm elections kiplinger.com.

The main uncertainties center on whether the Fed stalls out at the current single hike or follows the most hawkish dots. On the downside, a sharp deterioration in the labor market, an unexpected de-escalation in the Middle East dragging oil prices lower, or intense political pressure could result in a one-and-done adjustment. Market pricing leaves roughly a 10%–15% chance for this scenario, with Citigroup actively forecasting no further changes 2 sources. Conversely, if energy and tariff-driven inflation persist or broaden, back-to-back hikes in October and December become highly viable. Both Bank of America and the four hawkish SEP outliers expect two additional hikes, which would bring the year's total to three 3 sources. Note that a 50bp move at a single meeting would still only count as one hike under the resolution criteria.

Synthesizing these factors, the probability distribution firmly centers on a median and mode of 2 total hikes. There is an estimated ~15% chance of staying at 1 total hike, ~63% for 2 hikes, and ~22% for 3 hikes. Because the resolution criteria require an integer count but the forecast format requires strictly increasing percentiles, the estimates are smoothed around the discrete thresholds. The lower percentiles rest near the already-banked floor of 1, the median lands cleanly on 2, and the 90th percentile stretches toward the realistic upside tail of 3.