Where the dots land

The Fed publishes its own forecast this afternoon, and it has spent this year revising that forecast upward.

• The decision lands at 2:00, and the hike is at 89% on Polymarket (Polymarket). The quarter point is the part everyone will lead with. The Summary of Economic Projections comes out at the same moment, and that’s where the committee writes down where it thinks rates go next.
• The dots have been chasing all year. In March the median had the funds rate ending 2026 at 3.4%. By June that median was 3.8% (Fed projections). The market has moved further than the committee has, with two or more hikes this year at 53% (Polymarket).
• Receipt on yesterday’s issue: the Clarity Act cloture vote failed. The official roll call has it 49 to 50, well short of the 60 it needed (Senate roll call 234). Our threshold said under 60 and it stalls again, which is where it is.

Threshold: 2:00 pm

The test is the 2026 median in the dot plot.

The target range going into today is 3.50% to 3.75%. A quarter point puts it at 3.75% to 4.00%, with a midpoint just under 3.9%. So a 2026 median that lands near 3.9% is the committee saying today was the last one this year. A median up around 4.1% is the committee penciling in another.

That second version is the one the market is already partly betting on at 53%. If the dots go to 4.1% and the market is at 53%, expect that number to jump within minutes. If the dots hold near 3.9%, the 53% is the thing that moves instead.

The median is the number to look for when the projections drop.

Who pays: the forecast reaches your loan before the Fed does

The Fed sets one rate, the overnight rate banks charge each other. Almost nothing a household borrows is priced off that directly.

A 30-year mortgage is priced off what lenders expect rates to average over years, not off what the Fed did this afternoon. Same with car loans and anything else long. Those expectations move on the dot plot, on the statement, and on the press conference, which is why a mortgage rate can move on a day the Fed changes nothing at all.

The exceptions are the things chained to prime. Credit cards and home equity lines reprice off prime, and prime moves the day the Fed moves. So a household with a card balance feels today’s quarter point on the next statement, while a household shopping for a mortgage is reacting to a forecast published in a PDF.

Net net: the rate decision hits floating-rate debt within a month, and the dot plot hits everything long within the hour.

Headlines

• PPL Electric settled its Pennsylvania rate case for $275 million. Average residential bills rise 4.9% to about $184 a month, and large load customers like data centers now have to sign initial terms of at least 10 years (Utility Dive). A ten-year minimum is a utility deciding who it expects to still be billing in 2036.
• Anthropic had scheduled a price increase on Claude Sonnet 5, from $2 and $10 per million input and output tokens to $3 and $15 on September 1. That increase was cancelled and the lower price is now standard (Anthropic). Anyone who budgeted a 50% jump in their AI line this quarter can put it back.
• The Clarity Act’s failure leaves crypto market structure to the next Congress or to the agencies. Polymarket has a bill signed into law this year at 5%, after pricing 20% the morning of the cloture vote.

Decision at 2. The projections land with it.