Traders are pricing in a real chance the Federal Reserve tightens again on October 28, even as holding steady remains the base case
The market now assigns a 24.9% chance that the Federal Reserve raises rates by 25 basis points at its October 28 meeting. That is roughly a one-in-four shot at another hike, barely a month after the last one.
The Federal Open Market Committee is scheduled to meet October 27-28, 2026. The 24.9% reading lines up with figures shown on CME FedWatch, which tracks rate expectations implied by fed funds futures.
That CME reading came after dovish remarks from Fed officials. Those comments briefly cooled hike expectations, and the odds then slipped ahead of the latest inflation print.
Then the September Consumer Price Index arrived on October 14. Prices rose 0.6% month over month, the largest monthly increase in five months. Core CPI, which strips out volatile food and energy costs, also came in above forecasts.
Odds of a hike jumped from the mid-teens to somewhere between 33% and 47%, depending on which market you checked.
On Kalshi, the probability of a 25 basis point hike climbed to 33%, up from 16% before the report. Polymarket saw an even sharper move, with odds peaking at approximately 47.5%.
Despite all the movement, current pricing still treats no change as the most likely result in October. The meeting is two weeks out, and uncertainty remains high.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
In September 2026, the Fed raised its policy rate by 25 basis points, lifting the target range to 3.75-4.00%. It was the first hike in over three years and came under Chairman Kevin Warsh.
The September decision wasn’t framed as a one-and-done. The Fed’s own projections from that meeting showed most policymakers saw at least one more rate increase as appropriate before year-end.
Inflation continues to run above the Fed’s 2% target, and price pressures have been broadening across the economy. A 0.6% monthly CPI gain does little to calm those concerns.
Earlier in October, softer jobs data and dovish commentary from Fed officials had pushed hike probabilities lower. The CPI report reversed much of that, which explains the whiplash in pricing over just a few weeks.
Many assessments now point to December as the more likely meeting for the next hike. That view fits with the Fed’s year-end projections without forcing policymakers to move back-to-back.
Hiking in October would mean tightening at consecutive meetings. That would signal more urgency than the Fed has so far shown, which is part of why October remains a minority scenario in the pricing.
For investors, the main takeaway is that rate expectations have become highly sensitive to incoming data. A single inflation report moved hike odds by double digits in a day.
There’s also a meta angle here. Kalshi and Polymarket, both prediction markets, are now cited next to CME FedWatch as gauges of Fed expectations. Their sharper post-CPI moves show they can react faster, or more aggressively, than traditional futures-based tools. The roughly 14 percentage point gap between Kalshi’s 33% and Polymarket’s peak near 47.5% illustrates that divergence concretely.
Watch how Chairman Warsh frames the outlook. With policymakers already on record favoring at least one more hike this year, the October meeting may matter as much for what it says about December as for what it actually decides.