How many more rate rises do forecasters expect after 16 September?
One or two. The Federal Reserve's median projection implies one more quarter point in 2026. Goldman Sachs is reported to expect it in October. KKR expects two, in December and March, taking the federal funds rate to 4.375 percent.
The Committee's position is the September Summary of Economic Projections: a median federal funds rate of 4.1 percent at the end of 2026, against a target range of 3.75 to 4.00 percent today. Sixteen of the eighteen participants pencilled in at least one further rise this year.
Goldman Sachs had treated September as the only rise of 2026. Two reports on 17 September say its economists moved after the meeting to a baseline of a further quarter point in October. We have not read the note itself, so we carry the call and nothing behind it.
KKR's macro team published its view the same week. It kept its call for rises in December and March, against what it described as the Committee's expectation of just one more, and called the sequence an adjustment cycle, not a full tightening cycle.
Is KKR's 4.375 percent an outlier?
No. It sits inside the Committee. In the Federal Reserve's own participant counts, four of eighteen officials already have the rate at 4.375 percent for the end of 2026, and eight of eighteen have it there for the end of 2027.
For 2027 that makes 4.375 percent the single most popular projection. Six officials sit at 4.125 percent, three at 3.625 percent and one at 3.125 percent. The 4.1 percent median for 2027 is the middle of a split Committee, and twice as many officials sit above it as below it.
A median is a convenient number to put in a model. A borrower should know that nearly half of the people setting the rate expect it to be a quarter point above the median at the end of next year.
| Forecaster | Next moves | Where the rate settles | Source and date |
|---|---|---|---|
| Federal Reserve, median participant | 4.1% at end 2026, against a 3.75% to 4.00% range today | 4.1% end 2027, 3.9% end 2028, 3.6% end 2029, 3.2% longer run | Federal Reserve SEP, 16 September 2026 |
| Federal Reserve, June median | 3.8% at end 2026 | 3.6% end 2027, 3.4% end 2028, 3.1% longer run | Federal Reserve SEP, June 2026, as shown in the September table |
| Federal Reserve, participants at 4.375% | 4 of 18 for end 2026 | 8 of 18 for end 2027 | Federal Reserve SEP, Figure 2, 16 September 2026 |
| Federal Reserve, participants expecting a further rise in 2026 | 16 of 18 | Federal Reserve SEP, Figure 2, 16 September 2026 | |
| Goldman Sachs | A further quarter point in October; previously none after September | Goldman Sachs, as reported 17 September 2026 | |
| KKR | Quarter points in December and March | 4.375%, held through early 2029; previously 2028 | KKR, Flash Macro, September 2026 |
| KKR, 10-year Treasury yield target | 5.1% at end 2026, from 5.0% | 4.9% at end 2027, from 4.7% | KKR, Flash Macro, September 2026 |
Where do the forecasts actually disagree?
On the length of the hold. The Committee's median starts down in 2028, to 3.9 percent, then 3.6 percent in 2029 and 3.2 percent in the longer run. KKR now expects 4.375 percent to hold through early 2029, where it previously said 2028.
KKR's reasoning is that the Committee itself may no longer expect inflation back at target until 2029. It ties that to what it calls a regime change: a core CPI run-rate closer to 2.5 percent than the 1.5 to 2.0 percent of the years before the pandemic, driven by fiscal deficits, demographics, geopolitics and an uneven energy transition.
The Committee has been moving toward that view, not away from it. Between June and September its median for the end of 2027 rose from 3.6 to 4.1 percent, and for the end of 2028 from 3.4 to 3.9 percent. Half a point was added to each of the next two years in a single meeting.
The gap that remains is ours to measure. At the end of 2028, KKR's 4.375 percent stands roughly half a point above the Committee's 3.9 percent median. On 10 million dollars of unhedged floating-rate principal, half a point is 50,000 dollars a year of cash interest.
What does a 5.1 percent ten-year Treasury target mean for a borrower?
It means fixing the rate is not a cheap way out. KKR raised its 10-year Treasury yield target to 5.1 percent for the end of 2026, from 5.0 percent, and to 4.9 percent for the end of 2027, from 4.7 percent.
KKR's argument is that investors at the long end will demand a healthy term premium while nominal growth is elevated, deficits are large and capital is in demand. Fixed-rate debt and the fixed leg of a hedge are priced off that part of the curve, so a borrower waiting for the long end to fall before fixing is betting against this forecast.
The same yields sit under every valuation. A buyer's cost of capital is built up from the long end, and a higher one for longer leans on the multiple a buyer can pay for the same earnings. We make no forecast of multiples here. The direction of the pressure is what an owner planning an exit should register.
“Owners ask us when rates peak. It is the wrong question. A peak you pass through in a quarter does little harm. A level you sit at for years decides how much debt the business can carry and what a buyer can pay for it.”
What should an owner or a sponsor do when the forecasters disagree?
Plan on the higher path and treat the lower one as upside. Run debt service with the base rate at 4.375 percent, held to the maturity of the facility, and check the result against the tightest covenant. If the plan only works on the median, it is a plan with eight officials against it.
Do not build a refinancing case that needs rate cuts before 2029. A facility that matures in 2028 will be refinanced, on KKR's path, at the same base rate it carries at its peak. The case for the refinancing has to come from earnings and deleveraging, not from the curve.
Decide the fixed and floating mix on purpose. Neither side is cheap if KKR is right about both ends of the curve, so the choice is about how much variability the business can absorb, not about which rate looks lower today.
For an owner weighing a sale, the forecasts remove one reason to wait. If the hold runs to 2029, a buyer's cost of capital in two years looks much like its cost of capital now, and the value gained by waiting has to come from the business itself.
As of 18 September 2026
Sources: Federal Reserve, Summary of Economic Projections, 16 September 2026, Table 1, for the target range of 3.75 to 4.00 percent and median federal funds rate projections of 4.1 percent for 2026, 4.1 percent for 2027, 3.9 percent for 2028, 3.6 percent for 2029 and 3.2 percent in the longer run, and for the June medians of 3.8, 3.6, 3.4 and 3.1 percent; Federal Reserve, Summary of Economic Projections, 16 September 2026, Figure 2, for the participant counts: for the end of 2026, four of eighteen at 4.375 percent, twelve at 4.125 percent and two at 3.875 percent; for the end of 2027, eight at 4.375 percent, six at 4.125 percent, three at 3.625 percent and one at 3.125 percent. KKR, Flash Macro: U.S. FOMC, September 2026, for the call for two additional rises in December and March against the Committee's expectation of one more, the hold at 4.375 percent through early 2029 against 2028 previously, the adjustment-cycle description, the view that the Committee may not expect inflation at target until 2029, the core CPI run-rate closer to 2.5 percent against 1.5 to 2.0 percent before the pandemic and its four structural forces, the 10-year Treasury yield targets of 5.1 percent for the end of 2026 (from 5.0 percent) and 4.9 percent for the end of 2027 (from 4.7 percent), and the term premium argument. Goldman Sachs, via Crowdfund Insider and 24/7 Wall St, 17 September 2026, for the revised baseline of a further quarter point in October and the earlier view that September would be the only rise of 2026. The half-point gap between KKR's path and the Committee's 2028 median, the interest cost on 10 million dollars of floating-rate principal, the reading of the participant counts, and all advice to an owner or a sponsor are ours.
Corrections: factual errors are corrected on the page and the correction dated. Write to admin@kadenwoodgroup.com.
This position sits within our debt advisory practice.