Recent September 2026 FOMC action—raising the federal funds target to 3.75-4.00% for the first time since 2023—combined with updated projections showing a 4.1% median endpoint for year-end 2026, has anchored trader expectations for another 25-basis-point hike at the October 27-28 meeting. Market-implied odds remain closely split between a hike (53.5%) and no change (44.5%) because incoming data, including the October 14 CPI release, could still shift the inflation trajectory or labor-market signals. Elevated year-over-year CPI at 3.4% and core at 2.4% in August, alongside a 4.1% unemployment rate, underscore the tension between persistent price pressures and resilient growth that keeps both outcomes viable ahead of the next policy decision.

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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