Current policy stance and timeline covered by the market

• As of late July 2026, the Federal Reserve’s target range for the federal funds rate is 3.50%–3.75%, unchanged since a 25 bp cut on December 10, 2025 that set the range at this level [1][2][3].

• The question’s window runs from December 16, 2025 through the completion of a specific FOMC meeting that occurs before or around October 29, 2026. In practice, the relevant potential decision points are the remaining scheduled 2026 FOMC meetings over that horizon.

Relevant 2026 FOMC meetings in the window
From the Fed’s official calendar [1], the 2026 meetings after December 16, 2025 and before the end of October 2026 are:

• January 27–28, 2026

• March 17–18, 2026*

• April 28–29, 2026

• June 16–17, 2026*

• July 28–29, 2026

• September 15–16, 2026*

• October 27–28, 2026
  (* indicates meetings with Summary of Economic Projections, including dot plot.)

Up to and including the June 16–17, 2026 meeting, the FOMC has held the target range at 3.50%–3.75% at every meeting, with the June 17, 2026 statement explicitly maintaining that range [2][3]. Thus, as of July 27, 2026, no hike has yet occurred in 2026.

Fed’s own projections and internal balance of opinion

• The June 2026 Summary of Economic Projections (SEP) and associated coverage indicate that 9 of 18 FOMC participants projected the federal funds rate would end 2026 above its current 3.50%–3.75% range [4][5]. That implies at least one hike in 2026 in roughly half the individual projections.

• The median projection shifted to a somewhat higher path for 2026 (e.g., commentary citing a 3.8% median projected policy rate for 2026) [4][5], consistent with one modest hike (25 bps) rather than a full tightening cycle.

• Minutes from the June meeting note that officials are split: some argue for tightening if inflation does not cool further, others stress patience and the risk of over-tightening [6]. But there is no consensus for cuts in 2026; instead, the Committee has removed an explicit easing bias.

• This internal configuration is classic for a scenario where a single, data-dependent hike later in the year is a live option.

Inflation and macro backdrop

• Headline CPI inflation was 3.5% year-over-year in June 2026, down from 4.2% in May but still well above the 2% target [7][8]. Core CPI is around 2.6%–2.8% [7].

• The June CPI report showed a monthly decline (-0.4% m/m), suggesting some easing of price pressures, but the Fed’s own July 2026 Monetary Policy Report continues to describe inflation as above target and acknowledges upside risks [3][6].

• Labor market conditions remain relatively solid; unemployment is modestly above its cycle lows but not high enough to force cuts. This combination—still-elevated inflation, decent growth, and a labor market that has cooled only slightly—justifies a tightening bias or at least a willingness to hike if inflation stabilizes too high.

• Chair Kevin Warsh has emphasized that “prices are too high” and has explicitly pushed back on near-term cut expectations, reinforcing the idea that holding or hiking are more likely than cutting through 2026 [6].

Why a hike in 2026 is plausible (not guaranteed)

• The Fed’s own projections (9 of 18 officials seeing a higher year-end 2026 rate) and public commentary from major banks and asset managers suggest that a hike at some point in 2026 is more likely than not, though not a lock [4][5][6].

• That said, there are strong arguments against hiking: inflation has come down from its peaks, the Fed has already moved substantially from the zero lower bound, and there are concerns about over-tightening into a slowing global environment. The June minutes show active debate about both potential hikes and cuts [6].

• Taking these together, my view is that the probability of at least one hike in 2026 is above 50% but with substantial uncertainty (say on the order of 60–70%). Within that, we need to distinguish which meeting is the single most likely to deliver the first hike in the specified window.

Data calendar and meeting-by-meeting assessment (post-June 2026)
We’re concerned only with meetings after July 27, 2026 that still fall within the market’s window.

July 28–29, 2026

• Timing: very soon (late July). As of the latest commentary, economists widely expect the Fed to hold at this meeting given limited additional data since June and the Fed’s desire to avoid abrupt shifts [6].

• July CPI data will not yet be available at this meeting. Acting on essentially the same inflation snapshot as in June would be an aggressive signal the Committee has not indicated it is ready to send.

• I assign a relatively low probability to a July hike; this is more of an inflection-point meeting for guidance rather than immediate action.

September 15–16, 2026 (SEP + dot plot)

• By this meeting, the Fed will have:

  • Full CPI releases for July and August 2026 (August CPI is scheduled for Sept 11, 2026 [9]).

  • Additional labor market and activity data over the summer.

• If inflation stalls around 3.5% or ticks up, the case for hiking in September becomes strong: the Fed would have persistent above-target inflation plus multiple readings showing limited further progress.

• However, institutional behavior suggests some caution. With only two new CPI prints (July and August) following June’s improvement, the Committee may prefer to see a longer trend before decisive tightening—particularly after a long period of unchanged rates.

• Importantly, the June dot plot already signaled just one or at most a small number of hikes in 2026. The Fed may want to use the September SEP to lay groundwork and signal a bias, then act once more data confirm the trend.

• Net: I assign meaningful but not dominant probability that the first hike could occur in September.

October 27–28, 2026

• By the October meeting, the FOMC will have three additional CPI prints beyond June:

  • July CPI (mid-August release),

  • August CPI (Sept 11 release),

  • September CPI (Oct 14 release) [9].

• This richer data set over Q3 gives a much clearer picture of whether inflation is re-accelerating, stuck above 3%, or continuing to edge down.

• From the Fed’s perspective, October combines:

  • Sufficient lead time since the last SEP (June) and the upcoming September SEP to prepare markets for a possible move.

  • Enough realized inflation and labor data to justify a hike as ‘data driven’ and defensible.

• Economically, if inflation remains around 3–3.5% with only modest improvement, and the labor market has not materially deteriorated, a single 25 bp hike in October—lifting the range to 3.75%–4.00%—balances the desire to push inflation expectations back toward target with the risk of over-tightening.

• If inflation instead drops convincingly toward 2.5% or lower, the Fed can skip October and potentially avoid hiking altogether, which is why the overall hike probability is far from certain. But conditional on a hike happening in 2026, October is an attractive time: more data than September, and still early enough that the Fed can observe effects before 2027.

Emergency / inter-meeting hikes

• Emergency hikes are allowed under the resolution criteria, but such moves historically have occurred in response to acute financial or inflation shocks. With inflation drifting down from earlier peaks and no major crisis signaled in current commentary, the probability of an inter-meeting hike in the specific window is low compared with scheduled-meeting hikes.

Balancing probabilities across meetings
Putting it all together:

• Probability of no hike at all in the window remains material given downward inflation momentum and a still-fragile global backdrop.

• Conditional on one hike in 2026, the most plausible windows are the September and October meetings, as they are late enough to incorporate substantial 2026 data but early enough to match the dot-plot horizon and let policy work before 2027.

• September benefits from being an SEP meeting, but the Fed may prefer to adjust projections and signaling then and act on the richer post-September-CPI information set in October.

• October thus has a slight edge as the single most likely meeting for the first hike, though the probabilities are close and absolute confidence is modest.

Given these tradeoffs, a reasonable decomposition would assign a somewhat higher single-meeting probability to an October hike than to any other specific meeting, but still leave substantial mass on “no hike” and on a possible September move. That structure is consistent with a forecast like:

• “First hike at October meeting” as the single most likely specific outcome at roughly one-third probability.

Why I choose “October Meeting, ~35%” as my final answer

• The question asks for the single most likely outcome among several discrete timing options, each mutually exclusive, not for the overall probability of any hike.

• Based on the evidence, I judge:

  • Probability of no hike in the window to be notable (perhaps on the order of 30–40%),

  • Probability of a hike at some point in the window slightly higher (around 60–70%),

  • Within the ‘hike’ scenarios, October edges out September and other meetings because of its superior data backdrop and alignment with the Fed’s gradualist, data-dependent approach.

• Multiplying these rough components leads me to a ballpark figure where “first/only hike at the October 2026 meeting” sits around one-third probability, which I summarize as “October Meeting, ~35%.”

• Given the clear uncertainty in both inflation’s path and the Fed’s reaction function under Chair Warsh, I classify this as a Medium confidence forecast: there is genuine ambiguity, but the October meeting stands out slightly relative to other discrete options.