RatesMarket noteWednesday 28 October 2026, 09:27
Fed decision today at 2pm in Washington: futures give a hold 88.1%. The chance of a higher rate by December jumped to 89.1% in a day, so the words matter most.
The Fed decision today, Wednesday 28 October, is due at 2pm in Washington, 19:00 in Tirane, and markets are almost sure it will be a hold. Futures put the chance that the Federal Reserve leaves its target range at 3.75% to 4% at 88.1%, and of a quarter-point rise at 11.9%, on Central Bank Watch’s reading of the 27 October close.
The bigger move came in the odds for December. By the meeting of 9 December, futures now give an 89.1% chance that the rate will be higher than today, up from 78.6% a day earlier. Markets price 72 basis points of rises in all over the next ten meetings, close to three quarter-point increases. So today’s question is less what the Fed does than what it says about the next step.
The Fed raised its range by a quarter point to 3.75% to 4% on 16 September, its first rise since July 2023, and officials pencilled in one more by the end of the year. We set out yesterday why markets think it will wait until December: a weak September jobs report, and inflation that is still driven mostly by energy.
This meeting has no new economic projections. The Fed publishes them four times a year, and the next set comes with the December meeting, its calendar shows. Today there is only the statement, the vote and the chair’s press conference. A hold would leave the rate that banks actually pay each other overnight where it is: the effective federal funds rate was 3.88% on 26 October, New York Fed data show, and that is the rate that feeds through to credit cards, business loans and savings accounts.
1. A hold that points to December. This is what markets price. If the statement and the press conference keep a rise on the table for December, little should change: the odds are already near 90%. The 2-year Treasury yield, the one most tied to Fed policy, was 4.70% on 27 October, Treasury data show, and it would likely stay close.
2. A hold that sounds patient. If officials stress September’s weak jobs figures and say they can wait, the December odds would fall back. The 2-year yield would drop, and the dollar with it. That could ease pressure on emerging-market currencies, which have had a rough week: Brazil’s real lost 8.4% on Monday after its election.
3. A rise today. Futures give it about one chance in eight. A surprise would lift short-term yields sharply and strengthen the dollar.
The September rise gives a guide to how much the words can matter. On 16 September, the day of the decision, the 2-year yield rose 7 basis points, to 4.74%; the next day it fell back to 4.67%, Treasury data show. The move had been priced, and the reaction faded within a day.
Since then, yields have gone up and come back. The 10-year yield reached 5.31% on 5 October and was 4.99% on 27 October, against 5.01% on the day of the September rise. The 2-year yield, at 4.70%, is also close to where it was then. The bond market already prices a Fed that keeps raising rates, but slowly.
This is analysis and opinion, not investment advice.
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