Will the Fed raise interest rates at its December 8-9, 2026 meeting?

The committee has told the public it expects one more hike this year: 16 of 18 officials projected at least one more increase in 2026 at the September meeting. Having raised rates once against open pressure from the White House, Kevin Warsh's committee would pay a credibility cost for dropping the projected hike after September CPI rose 3.7% over the year and core prices beat forecasts. That makes "one more hike by year end" close to a commitment.

What the leadership has not committed to is a second move this year. On October 13, Williams told Bloomberg News that it may be appropriate to have one more rate hike and that he saw no reason at this time to expect more in 2027, Reuters reported. He did not say whether that one hike could be followed by another in December. Four of 18 officials projected two more hikes in 2026, so a second move has support, but the vice chair has spoken only of one.

December 9 is also the politically cheaper date. It comes five weeks after the November 3 midterms, so a hike then cannot be read as an attempt to sway the vote. No official has named a meeting for the next move.

Reference class: every September since the Fed began publishing rate projections in 2012 in which the median official projected at least one more hike before year end: 2015, 2016, 2017, 2018, 2022 and 2023. The Fed delivered that projected hike by December in five of the six; in 2023 it held for the rest of the year (TPG count from the Fed's projections and its table of rate changes).

Closest analogue is 2018: a September hike under public attack from President Trump, a hold at the meeting nearest the midterms, and a December hike. The 2016 case also fits, with a single projected hike delivered in December after a national election. The 2023 miss is the warning: the projected hike was dropped when inflation cooled and markets tightened on their own.

Where the analogues break: in 2015 to 2018 the Fed moved mostly at quarterly press conference meetings, so October was rarely live. Today every meeting is live, and a hot October would turn the question from whether the Fed hikes in December into whether it hikes twice in a row.

Start from the base rate of 5 of 6, about 83%, for a projected year end hike being delivered. That rate counts a hike at any remaining meeting, while this question needs one at the December meeting itself, so we split the path by October.

If the Fed holds on October 28, which we put at 70% in our October forecast, we put a December hike at 84%: the base rate, plus a little for hot September inflation, minus a little for the weak September jobs report. If the Fed hikes on October 28, which we put at 30%, we put a second straight hike at 55%. That reflects a hotter world in which 4 of 18 officials already saw two more hikes, offset by Williams speaking only of one more. CME FedWatch pricing implies about 90% in that branch (30.6% for two hikes against 33.8% for an October hike, our calculation), which we think overstates how readily this committee moves at consecutive meetings. Our calculation: 0.70 times 0.84 is 0.59, plus 0.30 times 0.55 is about 0.16, for 75%.

The range of 62% to 86% reflects the October decision, the October and November inflation reports, and the labor data before the meeting. We sit below the base rate and below both markets mainly because of the branch in which October is used.