Market participants currently estimate a 24.9% probability that the Federal Reserve will implement a 25 basis point interest rate hike at its upcoming meeting on October 28, 2026. This figure is based on data from CME FedWatch, which tracks expectations derived from federal funds futures.
The shift in market sentiment followed the release of the September Consumer Price Index on October 14, which showed a 0.6% month-over-month increase. This represents the largest monthly rise in five months, with core inflation figures also exceeding initial forecasts.
Prediction markets showed significant volatility following the inflation report. On Kalshi, the probability of a rate hike rose to 33% from 16%, while Polymarket saw expectations peak at approximately 47.5%.
Despite these adjustments, maintaining current rates remains the primary expectation for the October meeting. The Federal Open Market Committee is scheduled to convene on October 27-28, 2026.
In September 2026, the Federal Reserve raised rates by 25 basis points to a target range of 3.75-4.00%. This move, led by Chairman Kevin Warsh, marked the first increase in over three years.
