Key Takeaways

Markets are pricing an 82.3% probability that the Federal Reserve will keep interest rates unchanged in October, according to CME FedWatch data.

The probability of a 25-basis-point October rate hike stands at 17.7%.

By December, the probability of rates remaining unchanged falls sharply to 17.3%.

Markets assign a 68.7% probability of a cumulative 25-basis-point rate hike by December, making it the dominant year-end scenario.

The probability of a cumulative 50-basis-point increase by December stands at 14%.

Markets increasingly expect the Federal Reserve to leave interest rates unchanged at its October meeting, while continuing to price a higher probability of further monetary tightening by the end of the year.

According to CME's FedWatch tool, traders currently assign an 82.3% probability that the Fed will maintain its current interest rate range in October.

The probability of a 25-basis-point increase at the October meeting stands at just 17.7%.

Fed October Rate Hike Odds Stand at 17.7%

Current futures pricing suggests a rate hold remains the overwhelmingly favored outcome for the Federal Reserve's October meeting.

The 82.3% probability of no change compares with a 17.7% chance that policymakers raise rates by 25 basis points.

The figures indicate that traders see limited probability of an immediate increase in borrowing costs.

However, expectations change considerably when looking further ahead.

Markets See 68.7% Chance of 25-Basis-Point Hike by December

By December, markets see only a 17.3% probability that interest rates remain unchanged.

Instead, the most likely scenario is a cumulative 25-basis-point increase, which currently carries a 68.7% probability.

Markets also assign a 14% probability of a cumulative 50-basis-point increase by December.

Together, the figures show that while investors largely expect the Fed to remain on hold in October, they have not ruled out additional monetary tightening later in 2026.

Fed Rate Outlook Remains Important for Bitcoin and Risk Assets

Federal Reserve interest rate expectations remain a key macro factor for Bitcoin, cryptocurrencies and U.S. equities.

Higher interest rates generally tighten financial conditions and increase the relative attractiveness of yield-bearing assets, while expectations for stable or lower rates can provide a more supportive backdrop for risk assets.

The latest FedWatch probabilities therefore present a mixed picture: an October rate hike is currently viewed as unlikely, but markets still see further tightening by December as the most probable outcome.

Upcoming inflation, employment and economic data could continue to shift those expectations ahead of the Fed's remaining policy meetings.