- 25 bps increase65%
- No change34%
- 50+ bps increase1%
- 25 bps decrease0%
- 50+ bps decrease0%
The story so far
written Sep 26What is happening
The Federal Open Market Committee (FOMC) meets October 27-28 to decide whether to raise interest rates again, a move that would increase borrowing costs for U.S. consumers and businesses [4]. Polymarket currently prices a 65% probability of a 25-basis-point hike and a 34% chance that rates remain unchanged [4]. These expectations follow a September 16 decision to raise the federal funds rate by 25 basis points [3][9].
Chairman Kevin Warsh stated the September increase was necessary to reach the 2% inflation target [3]. Economic indicators from August support the case for further tightening, as nonfarm payrolls grew by 162,000, significantly exceeding the forecast of 56,000 [2]. The unemployment rate remained at 4.1% during that period [2].
What to watch
The FOMC will announce its next interest rate decision on October 28, 2026 [4]. Most policymakers indicated in September that they anticipate at least one more rate hike before the end of the year [3]. Future decisions depend on upcoming Consumer Price Index (CPI) data, which recently showed a 12-month inflation rate of 3.4% through August [1].
Read the full brief · how we got here
How we got here
The Federal Reserve raised rates on September 16, 2026, marking a shift toward more aggressive tightening in the second half of the year [3][9]. This followed a period where core CPI, which excludes volatile food and energy prices, rose 0.3% in a single month [1]. The central bank previously issued implementation notes regarding rate targets in January and June 2026 as part of its ongoing monetary policy adjustments [10][11].
References · 7
- [1]bls.gov — Consumer Price Index (CPI) News Release - U.S. Bureau of Labor Statistics
- [2]reuters.com — US nonfarm payrolls blow past expectations in August; unemployment rate ...
- [3]reuters.com — U.S. Fed policymakers stance on interest rate hikes
- [4]cmegroup.com — FedWatch - CME Group
- [9]federalreserve.gov — Implementation Note issued September 16, 2026 - Federal Reserve Board
- [10]federalreserve.gov — Implementation Note issued June 17, 2026 - Federal Reserve Board
- [11]business.cch.com — PDF Federal Reserve Board - Implementation Note issued January 28, 2026
Timeline
newest firstWhen we started following: Fed signals further 2026 rate hikes after September increase and strong August labor data
The Federal Open Market Committee raised the federal funds rate by 25 basis points at its September 15-16 meeting [3]. Most policymakers signaled they expect at least one additional rate increase before the end of 2026 [3]. Chairman Kevin Warsh stated the September move was intended to make timelier progress toward the 2% inflation goal [3].
Economic data released in September supports the case for continued tightening. Nonfarm payrolls increased by 162,000 in August, nearly triple the forecast of 56,000, while the unemployment rate held steady at 4.1% [2]. The Consumer Price Index (CPI) rose 0.4% in August, bringing the 12-month inflation rate to 3.4% [1]. Core CPI, excluding food and energy, rose 0.3% for the month [1].
These developments reinforce the likelihood of a rate hike at the October 27-28 meeting. Polymarket currently prices a 25-basis-point increase at 65% and no change at 34%. The next FOMC decision is scheduled for October 28, 2026 [4].