Fed Decision in October?

Traders currently price "No change" at 72% for "Fed Decision in October?". Over the past 24 hours that probability moved up 0.5 points. Full distribution: No change 72%, 25 bps increase 24%, 25 bps decrease 4%, 50+ bps decrease 2%. The market has traded $616K in total volume and resolves Oct 28, 2026. Recent July CPI data showing headline inflation easing only modestly to 3.4% year-over-year, with core at 2.5%, alongside elevated energy prices, has anchored trader expectations for the October FOMC meeting. With the federal funds rate already steady at 3.50-3.75% following the July hold and dissenters favoring a hike, the 71.5% implied probability of no change reflects the Fed’s data-dependent pause amid a resilient labor market (unemployment at 4.1%). The 23.5% odds of a 25 basis point increase capture hawkish sentiment from persistent above-target readings and forward guidance, while deeper cuts remain sidelined below 5% combined. Key near-term catalysts include the August CPI release, September employment report, and the September 15-16 FOMC decision that could shift the October path.

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