Markets Put October Fed Rate-Hike Odds at 10% Ahead of Oct. 28 Decision

Market pricing assigned about a 10% chance to a 25-basis-point Federal Reserve rate increase on Oct. 28, while expectations continued to point to a possible move in December. The figure describes market expectations ahead of the meeting; the Fed has not announced an October increase. The market outlook points more strongly to a December move than to an October increase.

Some Fed officials have favored holding rates steady while they assess inflation and the effect of conflict in the Middle East on energy prices.

Goldman Sachs Chief U.S. Economist David Mericle sees a possible pattern of quarter-point increases at every other meeting. His timeline places a possible hike in December and another in March 2027, after the October meeting.

Attention will also turn to the Fed chair’s news conference after the October decision. Markets will watch for comments on recent inflation, financial conditions and the threshold for further tightening in 2027. The meeting’s decision is scheduled for Oct. 28.