Why the Fed's Two 4.1% Rate Medians Have Different Distributions

Why the Fed's Two 4.1% Rate Medians Have Different Distributions

The Federal Reserve's September projections print 4.1% for the federal funds rate at the end of both 2026 and 2027. Reading those two cells alone would miss the different distributions of dots underneath them. The count at the highest displayed level, 4.375%, rises from four participants in the 2026 column to eight in the 2027 column.

That comparison comes from Table 1 and Figure 2 of the September Summary of Economic Projections. The useful question is how the two distributions produce the same median, and how much a reader can infer from that coincidence.

The projections were released at 2:00 p.m. Eastern Daylight Time on 16 September 2026, or 04:00 Australia/Brisbane on 17 September. The Fed subsequently released the September meeting minutes at 2:00 p.m. EDT on 7 October, or 04:00 Brisbane on 8 October. The minutes confirm that the projections were prepared for the September meeting. They do not turn those dots into October forecasts.

This article was prepared at 07:04:36 Australia/Brisbane on Sunday, 11 October. The latest completed relevant U.S. regular equity session was Friday, 9 October. The NYSE's scheduled 16:00 EDT close corresponds to 06:00 Brisbane on Saturday, 10 October. No closing price, option quote or market reaction is used here. The Fed calendar lists its next meeting for 27–28 October.

Keep the two complete count records

Each dot in Figure 2 represents a participant's judgment of an appropriate year-end target-range midpoint or target level. The figure rounds those displayed values to the nearest one-eighth percentage point. Table 1 reports medians to one decimal place.

For end-2026, the complete nonzero count record is two dots at 3.875%, twelve at 4.125%, and four at 4.375%. These counts total 18. There are no dots at the other displayed levels in that year column.

For end-2027, the complete nonzero count record is one dot at 3.125%, three at 3.625%, six at 4.125%, and eight at 4.375%. These also total 18, with no dots at the other displayed levels in that column. The official September PDF preserves the accompanying figure and notes.

The following calculations use those published, rounded dots. They describe the display, without claiming more precision for participants' underlying submissions.

The middle stays put while the distribution changes

With 18 observations, the median is the average of the ninth and tenth values after sorting from lowest to highest.

In the 2026 column, the two 3.875% dots occupy ranks 1 and 2. The twelve 4.125% dots occupy ranks 3 through 14. Both middle ranks therefore fall at 4.125%:

(4.125% + 4.125%) / 2 = 4.125%

In the 2027 column, the single 3.125% dot occupies rank 1 and the three 3.625% dots occupy ranks 2 through 4. The six 4.125% dots occupy ranks 5 through 10. The ninth and tenth values remain 4.125%. The same calculation produces a displayed-dot median of 4.125%, consistent with the table's printed 4.1%.

The count at 4.375% is a different statistic. Four out of 18 is 22.2% to one decimal place; eight out of 18 is 44.4%. That is a 22.2-percentage-point difference in the share of displayed dots at that level, using the unrounded fractions before rounding the result. Neither share is a probability that the Fed will choose that rate.

The displayed low-to-high span also changes:

2026: 4.375% - 3.875% = 0.500 percentage points = 50 basis points

2027: 4.375% - 3.125% = 1.250 percentage points = 125 basis points

The second span is 75 basis points wider. It measures dispersion between the published endpoints, not a confidence interval for the future rate. A reader who retains the counts can see the difference without assigning a trading signal to it.

Anonymous columns do not identify individual paths

The two year columns are separate distributions. The published figure does not label dots with participants' names or connect one participant's 2026 dot to that person's 2027 dot. Subtracting the two medians gives zero, but that result cannot establish that every participant expects an unchanged rate. Nor does the extra count at 4.375% identify four particular people who raised their projections between years.

A year-to-year comparison within one September release also differs from a revision between two releases. It compares two forecast horizons, not what changed between June and September. Connecting dots or assigning individual revisions would require evidence that this public figure does not supply.

The denominator needs its own check when moving farther across the page. The September materials report 18 participants, with one omitting projections for 2028 and 2029. Those two year columns contain 17 projections. Dividing every future-year count by 18 would change the reported shares even if every dot had been counted correctly.

Keep an options scenario separate from the dots

The SEP describes policy assessments under participants' individual assumptions. It supplies no option series, executable price or investor-specific funding rate. Using a year-end median as an option model's rate input would add an assumption that needs to be stated and tested separately.

FINRA defines rho as the change in an option's theoretical price for a one-percentage-point rate change, holding other factors constant. The Options Industry Council's rho explanation also notes that interest rates can differ between clearing firms, brokers and accounts. Neither explanation makes a policy projection an automatically interchangeable model input. Our rho calculation guide covers the units and sign of a rate-only estimate; the Greeks guide covers the limits of local sensitivities.

Options can lose their entire purchase premium, and some short positions can lose more than the initial amount committed. A short American-style equity option can be assigned before expiration. Bid-ask spreads, available size, transaction costs and changing stock prices or implied volatility can affect an exit. Exercise and settlement can create cash or share obligations; taxes depend on the contract and circumstances. The dots resolve none of those contract-level risks.

This is general education, not personal financial, legal or tax advice. It contains no recommendation to buy, sell or hold an option or security. Options Matrix Pro publishes this research as a decision-support business; no product result or investment outcome is promised.

For a research file ahead of the next Fed meeting, retain the September release date, the relevant year, the full count record and its denominator. Label any separate options scenario with its actual rate input and quote time. The earlier minutes guide explains why the meeting date belongs alongside the later document date.

Sources and as-of date

Primary sources checked on 11 October 2026 Australia/Brisbane:

• Federal Reserve September 2026 SEP, accessible Table 1 and Figure 2.
• Federal Reserve September 2026 SEP, official PDF.
• Federal Reserve release of September meeting minutes, 7 October 2026.
• Federal Reserve September meeting minutes.
• Federal Reserve meeting calendar.
• NYSE hours and holiday calendar.
• FINRA options contracts, Greeks and risks.
• Options Industry Council rho reference.