Previously, market expectations were for the Federal Reserve to cut interest rates in 2026, but due to factors such as tariffs, rising inflation, geopolitical conflicts, and an economic slowdown, current expectations have shifted to rate hikes. A survey by the CME FedWatch Tool shows that 51% of interest rate traders expect the Federal Reserve to raise rates in October, and 70% expect rates to be higher by December. The Federal Open Market Committee (FOMC) anticipates one rate hike in 2026, followed by rate cuts in 2027 and 2028, with a long-term target of 3% to 3.25%.