The odds of a rate hike in October surged to 53.7% after CPI came in scorching hot. Bears, sleep easy. Bulls, set your stop-losses and alarms, and get up every now and then to check whether your positions are still there. Once they’re gone, you can sleep easy too.
Here’s my guess for what happens next: tomorrow night, the PPI odds will probably get pushed even higher, sparking another wave of panic. Then, going into the October 28 FOMC meeting, the odds will probably hover around 50%, keeping everyone guessing—but in the end, they won’t hike. After all, the midterm elections are coming up in November, and they’ll need to save face. That just pushes the pressure onto December and January 2027. The Fed has always been like this.
Here’s my guess for what happens next: tomorrow night, the PPI odds will probably get pushed even higher, sparking another wave of panic. Then, going into the October 28 FOMC meeting, the odds will probably hover around 50%, keeping everyone guessing—but in the end, they won’t hike. After all, the midterm elections are coming up in November, and they’ll need to save face. That just pushes the pressure onto December and January 2027. The Fed has always been like this.