Will the Fed Raise Interest Rates in 2026?

Quick answer: I put the odds of the Federal Reserve raising the fed funds rate at least once before the end of 2026 at 55–65% — my base case — with a 35–45% chance rates hold steady through year-end. A tight labor market, sticky inflation, and higher oil prices have pushed the outlook toward tightening, but nothing is settled until the data comes in.

Key takeaways:

• My base case is a 55–65% probability of at least one rate hike in 2026, versus 35–45% for no change.

• The case for a hike rests on above-target inflation, a resilient labor market, repricing in rates markets, and a more hawkish tone from several Fed officials.

• A hike becomes unlikely if core PCE cools, wage growth slows, the labor market weakens, or energy prices retreat.

• One additional 25-basis-point hike would probably not end the bull market on its own, but it would pressure richly valued, long-duration growth stocks and keep Treasury yields elevated.

• For high-net-worth portfolios, the takeaway is resilience, not retreat: quality cash flows, financials, and energy tend to weather tightening better than long-duration tech.

Quick answers

Will the Fed raise interest rates in 2026?

There is a meaningful chance it will. I'd put it at 55–65% for at least one hike before year-end, but it is far from certain and depends heavily on inflation and jobs data.

What are the odds of a Fed rate hike in 2026?

My estimate: 55–65% for at least one hike, 35–45% for rates holding steady through December.

When are the remaining 2026 FOMC meetings?

The Federal Open Market Committee is scheduled to meet on July 28–29, September 15–16, October 27–28, and December 8–9, 2026.

What should investors do if the Fed hikes?

Position for resilience. A single 25bp increase is unlikely to break the bull market, but it favors quality cash-generative businesses, financials, and energy over highly valued, long-duration growth names.

What are the odds the Fed raises rates in 2026?

With recent data showing a tight labor market, a strong economy, and rising oil prices tied to the ongoing conflict with Iran, the question worth asking is direct: will the Federal Reserve raise the fed funds rate this year?

I think there is a meaningful chance the FOMC raises interest rates at least once before year-end… but it is far from certain. Here is how I would assess the odds:

• Probability of at least one rate hike in 2026: 55–65%

• Probability rates remain unchanged through year-end: 35–45%

That is a base case tilted toward tightening, not a foregone conclusion. The balance can shift quickly, and it will shift on data rather than narrative.

Why is the Fed leaning hawkish right now?

Several factors have moved the outlook toward a more hawkish stance:

Inflation remains above the Fed's 2% target. The Fed's July Monetary Policy Report notes that inflation has picked up this year, partly because of higher energy prices and supply shocks. As long as inflation runs hot, the argument for cuts weakens and the argument for holding– or hiking, strengthens.

The labor market remains resilient. Low unemployment and continued productivity growth give the Fed room to keep policy restrictive if inflation does not ease. A strong jobs market removes the usual pressure to loosen.

Market expectations have changed quickly. Interest-rate futures have moved from pricing little chance of a hike to assigning roughly a one-in-three probability of a hike at the July meeting, with higher odds of tightening later this year. When the market repositions this fast, it tells you the risk is live.

Some Fed officials have turned more hawkish. Several policymakers have signaled that persistent inflation could require additional tightening if incoming data stay strong.

What could prevent a rate hike?

The Fed is likely to keep rates unchanged if the data cooperates. Specifically, I'd expect it to hold if core PCE inflation begins to moderate, wage growth slows, the labor market weakens materially, or oil prices retreat and supply-chain pressures ease.

Any one of these on its own would soften the case for tightening. Two or three together would likely take a 2026 hike off the table entirely. This is why I frame the odds as a range rather than a single number; the outcome is genuinely data-dependent.

Which economic data should you watch before the next FOMC meeting?

Between now and the remaining FOMC meetings, these are the releases I'm watching most closely:

• Core PCE inflation

• CPI inflation

• Nonfarm payrolls

• Unemployment rate

• Average hourly earnings

• Inflation expectations

• Energy prices

Core PCE is the Fed's preferred inflation gauge, so it carries the most weight. But the jobs figures matter almost as much: a resilient labor market is what gives the Fed the confidence to stay restrictive.

When are the remaining 2026 FOMC meetings?

The FOMC has four scheduled meetings left in 2026:

• July 28–29, 2026

• September 15–16, 2026

• October 27–28, 2026

• December 8–9, 2026

Each one is a potential decision point, and each will be judged against the data released in the weeks before it. The odds I've laid out apply across this full window, not to any single meeting.

What would a rate hike mean for your portfolio?

For equity investors, one additional 25-basis-point increase would probably not end the bull market by itself. But it would place pressure on richly valued growth stocks and keep Treasury yields elevated.

In that environment, financials, energy, and companies with strong cash flows would generally prove more resilient than highly valued, long-duration growth stocks — the names whose valuations depend most on distant future earnings, and which are therefore most sensitive to higher rates.

For high-net-worth investors, I'd frame this as a case for resilience rather than retreat. Higher-for-longer rates are not a reason to step away from equities; they are a reason to be deliberate about quality, duration, and cash-flow durability across the portfolio. This is the kind of environment where thoughtful positioning — the way we build resilient portfolios — tends to separate outcomes more than the direction of any single Fed decision.

How I'm thinking about it at Christie-Cox

My base case is a modest tilt toward tightening: more likely than not that we see at least one hike, but with real odds that the Fed holds. I'm not positioning for certainty in either direction. I'm positioning for a market where rates stay elevated, where valuation and cash flow matter more than momentum, and where the difference between a good year and a great one comes down to discipline.

If you'd like to talk through what a higher-for-longer scenario means for your specific portfolio, talk with our team.

This article is for informational and educational purposes only and reflects the author's views as of July 2026. It does not constitute investment, tax, or legal advice, nor a recommendation to buy or sell any security. Probability estimates are the author's own assessments and are not guarantees of future outcomes. Markets carry risk, including the possible loss of principal. Consult a qualified financial professional before making investment decisions.