🔴The Fed's shift in its rate outlook is truly remarkable: The Fed raised its benchmark rate to 3.75%-4.00% on Wednesday, marking its first hike since July 2023, while officials also indicate another increase before year-end. The median year-end federal funds rate forecast has risen from ~3.50% in March to ~3.75% in June and 4.00% in September, with every update pushing the projected rate higher. The September dot plot now shows 12 policymakers projecting at least one rate hike in 2026, including 4 expecting two hikes, while just 2 see no further hikes, signaling much stronger support for additional tightening. The shift reflects renewed concern over inflation, with Fed Chair Kevin Warsh pointing to widespread price gains above 3% across many categories of goods and services. Just months ago, the median forecast pointed to a lower interest rate by the end of 2026, but policymakers have now moved decisively toward a higher-for-longer path. It looks like another Fed pivot has arrived.