Markets Put 64% Odds on Fed Holding Rates Steady in October

Markets are pricing a higher likelihood that the Federal Reserve will keep interest rates unchanged in October, while expectations point to a greater chance of cumulative increases by December.

The probability of no rate change at the October meeting stands at 64%, while the implied probability of a 25-basis-point increase is 36%.

December pricing shows a different distribution. Markets assign an 11% probability to rates remaining unchanged, a 59.2% probability to a cumulative 25-basis-point increase and a 29.8% probability to a cumulative 50-basis-point increase.

The pricing snapshot reflects expectations as of Oct. 1 ahead of the Federal Reserve’s October policy meeting.