FinanceTracking
Fed 50bp hike probability very low: could it reverse?
The market prices a very low probability (about 0.35%) that the Fed will hike by 50+ bps after its October 2026 meeting, but if inflation surprises to the upside or employment data stays strong, could this expectation quickly reverse?
Watching: 关注10月27-28日FOMC会议声明、点阵图及主席发布会，以及会前关键经济数据（如CPI、非农）的意外情况。
Current read
current likelihood for a 50+ bps hike after the October 2026 Fed meeting is very low, but inflation or jobs surprises could quickly reverse expectations; evidence shows the probability of a 25 bps hike in October has risen to about 50%.
Evidence shows current likelihood for a 50+ bps hike after October 2026 is very low, but a recent inflation surprise has raised the probability of a 25 bps hike in October from about 20% to about 50% (evidence 2). Earlier, CME data on September 17 showed a 49.8% probability of a 25 bps hike, nearly matching the probability of holding rates (evidence 3, 4). This indicates market expectations are highly sensitive to economic data; if inflation rebounds or jobs data are strong, hike expectations could reverse quickly, but the supplied evidence does not specify changes in pricing for a 50+ bps hike.
Key developments
- The assessment representation was corrected; evidence and earlier records are retained.
How we read it
After an inflation data release on October 16, 2026, current likelihood for a 25 bps hike in October rose from about 20% to about 50%, showing data surprises can quickly shift expectations.
CME data on September 17 showed a 49.8% probability of a 25 bps hike, nearly matching the probability of holding rates, indicating market divergence on the rate path.
Earlier updates
- — Public tracking started; no independent probability estimate yet.; Starting public context: The FED interest rates are defined in this market by the upper bound of the target federal funds range. The decisions on the target federal funds range are made by the Federal Open Market Committee (FOMC) meetings. This market will resolve to the amount of basis points the upper bound of the target federal funds rate is changed by versus the level it was prior to the Federal Reserve's October 2026 meeting. If the target federal funds rate is changed to a level not expressed in the displayed options, the change will be rounded up to the nearest 25 and will resolve to the relevant bracket. (e.g. if there's a cut/increase of 12.5 bps it will be considered to be 25 bps) The resolution source for this market is the FOMC’s statement after its meeting scheduled for October 27-28, 2026 according to the official calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. The level and change of the target federal funds rate is also published at the official website of the Federal Reserve at https://www.federalreserve.gov/monetarypolicy/openmarket.htm. This market may resolve as soon as the FOMC’s statement for their October meeting with relevant data is issued. If no statement is released by the end date of the next scheduled meeting, this market will resolve to the "No change" bracket.
- — current likelihood for a 50+ bps hike after the October 2026 Fed meeting is very low, but inflation or jobs surprises could quickly reverse expectations; evidence shows the probability of a 25 bps hike in October has risen to about 50%.; Evidence shows current likelihood for a 50+ bps hike after October 2026 is very low, but a recent inflation surprise has raised the probability of a 25 bps hike in October from about 20% to about 50% (evidence 2). Earlier, CME data on September 17 showed a 49.8% probability of a 25 bps hike, nearly matching the probability of holding rates (evidence 3, 4). This indicates market expectations are highly sensitive to economic data; if inflation rebounds or jobs data are strong, hike expectations could reverse quickly, but the supplied evidence does not specify changes in pricing for a 50+ bps hike.