Recent Fed communications and the September 16 rate hike to the 3.75-4.00% range have anchored trader sentiment for the October 27-28 FOMC meeting, with the hawkish dot plot showing most participants expecting at least one additional 25-basis-point increase by year-end. Persistent August CPI readings—up 3.4% year-over-year overall and 2.4% on core—combined with a stable 4.1% unemployment rate and solid growth projections have kept the implied probability of another hike near 52.5%, narrowly ahead of the 46.5% chance of no change. Key swing factors include the October 14 CPI release and any signs of labor-market softening that could shift the balance before the meeting, where no new projections will be issued.

Sep 20 2026

Market pricing shifts sharply toward 25 bps increase ahead of October FOMC meeting

25 bps increase surges to 56%18%

Following the September FOMC meeting and updated projections, market prices for a 25 basis point increase in October surged from 38% to 56%, while the no change option dropped from 63% to 44%, reflecting growing consensus on a moderate rate hike at the October meeting.

Sep 17 2026

Markets react to Fed's hawkish September rate hike

25 bps increase surges to 53%15%

Following the September rate hike, markets adjusted expectations, with the probability of a 25 bps increase in October rising sharply, reflecting confidence in continued Fed tightening to combat inflation.

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