Fed Hike Odds for October 28 Fall to 13% as Warsh Keeps Markets Guessing

Traders now price only a 13% chance that the Federal Reserve raises rates at its October 27-28 meeting, while holding steady is priced at about 87%. Odds were far higher days earlier, right after a hot September CPI report, but fell after Vice Chair Philip Jefferson and New York Fed President John Williams signaled little urgency to move.

Inflation remains uncomfortable. Consumer prices rose 3.7% year over year in September, while wholesale prices rose 6.3%. CNBC estimates the data point to core PCE near 3.1%, well above the Fed’s 2% target. Markets see December as the more likely date for the next move: CME FedWatch showed about 63% for a 25 basis point hike as of October 14, and Polymarket gave 66% to exactly two hikes in 2026.

The main risk is Fed Chair Kevin Warsh, who has dropped forward guidance and distanced himself from the committee’s projections. CNBC warns investors may be too complacent. UBS argues a hike a week before the November 3 midterms would be politically untenable, although the Fed says it does not factor the electoral calendar into its decisions. The October 28 decision and Warsh’s press conference are the key event for risk assets, including crypto.

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Sources:

• CNBC: Markets expect the Fed to hold rates in October. Kevin Warsh could surprise them
• Forbes: Fed 66% Likely To Hold Rates Steady Following High Inflation Data
• Yahoo Finance: Traders Give Warsh a 42% Chance of Raising Rates
• DeFiRate: Fed decision odds (Kalshi/Polymarket)