Markets See Roughly Two-in-Three Odds of Another Fed Rate Hike in October

According to Donya-e-Eqtesad citing The New York Times, traders in fed funds futures as of Saturday, 26 September 2026 put the probability at about 70 percent that the Federal Reserve will raise rates by another 25 basis points at its 27 and 28 October meeting, taking the policy range to 4 to 4.25 percent. Trading Economics puts the probability at around 66 percent. In September the Fed raised rates by 25 basis points for the first time since 2023, to 3.75 to 4 percent, and 16 of 18 officials projected at least one more hike this year.

The expectation is driven by strong US data: private-sector activity in September hit a five-year high, and inflation remains elevated with oil above $100 and diesel prices rising. The US 10-year Treasury yield stood at about 5.17 percent on 25 September, near its highest level in roughly two decades. Higher US rates typically strengthen the global dollar and weigh on gold prices.