Fed meeting October 2026: markets expect a hold on Wednesday and a rise in December

At the Fed meeting of October 2026, on 27 and 28 October, markets expect the Federal Reserve to leave rates alone. Futures on the federal funds rate put the chance of no change on Wednesday at 88.1% and of a quarter-point rise at 11.9%, on Central Bank Watch’s reading of the 26 October close. The decision is due at 2pm in Washington, 18:00 UTC, the Fed’s calendar shows.

The October Fed meeting looks like a pause, not a turn. By the meeting of 9 December, futures price a 78.6% chance that the rate will be higher than it is now, and they price 71bp of rises in all over the next nine meetings. Markets still expect the increase that officials signalled in September. They doubt it comes this week.

Where the Fed meeting starts: 3.75% to 4%

On 16 September the Fed raised its target range by a quarter point to 3.75% to 4%, by a 12 to 0 vote, its first increase since July 2023. We explained then that officials had pencilled in one more. Their projections put the median rate at 4.1% at the end of 2026, a quarter point above the middle of the new range.

The minutes of that meeting went further. “Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” they say. They left the timing open, and we wrote on 8 October that the data since the meeting had made it harder to call.

Futures: chance the Fed rate is higher than today, by meeting, %. Source: Central Bank Watch, from CME federal funds futures, 26 October 2026 close. Each figure includes the moves priced for earlier meetings.

28 Oct 2026	11.9
9 Dec 2026	78.6
27 Jan 2027	87.0
17 Mar 2027	95.4

Source: Central Bank Watch, from CME federal funds futures, 26 October 2026 close. Each figure includes the moves priced for earlier meetings.The Macro Notebook

Why markets expect a hold in October

The jobs market slowed sharply in September. Employers added 29,000 jobs, Bureau of Labor Statistics data show, after 133,000 in August, and the unemployment rate rose from 4.1% to 4.2%. A Fed that raises rates into a weakening jobs market risks a slowdown of its own making.

Inflation gives it a reason not to wait long. Consumer prices were 3.7% higher in September than a year earlier, up from 3.4% in August, as fuel stayed dear. But the rise is still mostly energy. Prices excluding food and energy were up 2.6%, the core index shows, close to where they were in the summer. The Fed’s preferred gauge, core PCE prices, rose 3.0% in the year to August, the same as in July.

That mix favours waiting. Energy prices lift the headline rate quickly, and officials can afford a few weeks to see whether they spread to everything else.

What a hold would mean for bonds and the dollar

The bond market has already priced the pause. The 2-year Treasury yield, the most sensitive to Fed policy, was 4.68% on 26 October, Treasury data show, and the 10-year yield 5.00%. With the Fed’s range topping out at 4%, a 2-year yield that high says investors expect rates to be higher on average over the next two years than they are now.

So a hold on its own would move little. The words would matter more: whether the statement keeps the door open to a rise “by year end”, and what the chair says at the press conference. A clear signal for December would push the 2-year yield up. A sign that September’s jobs report has changed minds would pull it down, and the dollar with it.

Fed meeting October 2026: what to watch next

• Wednesday 28 October: the decision at 2pm in Washington, then the chair’s press conference.
• Thursday 29 October: the first estimate of third-quarter GDP and the September PCE prices, from the Bureau of Economic Analysis. The ECB decides the same day.
• Friday 30 October: the Bank of Japan’s decision.
• 9 December: the last Fed meeting of 2026, where futures now expect the rise.

For how the rate itself works, and what it changes for loans and savings, see our guide to the federal funds rate.