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 By Thomson Reuters Jul 30, 2026 | 1:44 AM July 30 (Reuters) – J.P.Morgan now expects the Federal Reserve to deliver a quarter-point rate hike in Decemb
TITLE: J.P. Morgan pushes Fed rate hike to December after July hold
META: J.P. Morgan now sees a 25‑bp Fed rate hike in December, shifting from a July hold; markets price a 65% chance of a September hike, down from 81% — see the numbers and market impact.
J.P. Morgan lifted its outlook for a Federal Reserve rate increase to the December meeting, after the central bank left policy unchanged in July, and markets trimmed the odds of a September hike to 65.2% 【3】.
| At a glance | |
|---|---|
| New forecast | 25 bp hike in December |
| Prior view | No hike in July; cut expected in September |
| Market pricing | 65.2% chance of a September hike (down from 81%) |
| Yield impact | 10‑year Treasury up ~7 bps after the July hold |
J.P. Morgan’s note said the Fed will deliver a quarter‑point increase in December, moving the expected hike forward from the second half of 2027 that the brokerage had previously projected 【3】. The shift follows the July FOMC decision, where three of the 12 voting members voted for a hike despite the overall “hold” outcome 【3】. The firm also warned that inflation remains above the Fed’s 2% target, which could pressure the committee to act sooner 【3】.
Traders now assign a 65.2% probability to a September rate hike, down from 81% before the July statement, according to the CME Group’s FedWatch tool 【3】. The reduced probability coincided with a 7‑basis‑point rise in the 10‑year Treasury yield and the 30‑year yield hitting its highest level since 2007 【4】. The bond market’s move reflects the mixed signals from the FOMC, where three members favored a hike while the majority held rates steady.
Other banks remain split on the path forward. Goldman Sachs and Barclays still expect rates to stay unchanged through year‑end, whereas BofA Global Research projects three hikes starting in September 【3】. Citigroup, a long‑time “dove,” continues to forecast cuts in October and December 【3】. These differing outlooks underline the uncertainty surrounding the Fed’s next move.
The December hike forecast highlights the Fed’s balancing act between lingering inflation pressures and a still‑tight labor market, leaving the path to future policy moves highly contingent on upcoming data and internal committee dynamics.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 4 outlets · Jul 30, 2026 · How we report
The Federal Reserve is scheduled to announce its decision regarding Fed Rates on Wednesday, September 16, 2026, at 2 p.m. ET.
Economists are predicting an increase in Fed Rates because the August 2026 Consumer Price Index rose to 3.4%, exceeding expectations and signaling that inflationary pressures are broadening beyond energy categories.
An increase in Fed Rates makes borrowing more expensive for consumers, which leads to higher costs for mortgages, credit cards, and auto loans.
As of September 12, 2026, analysts at EY-Parthenon project that a 0.25 percentage point hike would bring the target range for Fed Rates to between 3.75% and 4%.