October rate hike probability drops to 17%, yet interest rate futures still price in a rate hike.
The two figures are not moving in the same direction.
The nonfarm payroll data suggests employment is cooling: according to the CME FedWatch tool, the probability of the Fed holding rates steady in October rises to 83%, while the probability of a rate hike falls from 28% to 17%. On the federal funds futures side, as of end-2026, the cumulative rate hikes are still priced at about 22.2 basis points—only about 3.3 basis points lower than the 25.5 basis points priced before the data was released. It’s like one person says the ship has docked, while the other still hasn’t stopped rowing.
Next, watch the October meeting, and whether that 22.2 basis points by year-end will be wiped out.
#Fed October rate-hike probability falls to 17%
The two figures are not moving in the same direction.
The nonfarm payroll data suggests employment is cooling: according to the CME FedWatch tool, the probability of the Fed holding rates steady in October rises to 83%, while the probability of a rate hike falls from 28% to 17%. On the federal funds futures side, as of end-2026, the cumulative rate hikes are still priced at about 22.2 basis points—only about 3.3 basis points lower than the 25.5 basis points priced before the data was released. It’s like one person says the ship has docked, while the other still hasn’t stopped rowing.
Next, watch the October meeting, and whether that 22.2 basis points by year-end will be wiped out.
#Fed October rate-hike probability falls to 17%
