Fed Hike Odds October 2026: From ~58% to ~9%

FOMC Alerts · October 28, 2026

Fed hike odds October 2026, in short: our calculation from fed funds futures using CME’s method shows October hike odds collapsed from about 58% on Sep 18 to about 9% on Tuesday evening (Oct 27 ~9:19 PM ET) — a hold near 91.1%. December did not die with October; it dipped with Thursday’s 16 bp 2-year drop, then recovered. That path is the setup into Wednesday’s 2:00 PM ET statement and 2:30 press conference (no SEP). How the math is built is in fed funds futures probability.

How did October Fed hike odds swing?

October went from a near coin-flip to a hold-priced meeting in about six weeks. Our calculation from fed funds futures using CME’s method (ZQ settle path):

• Sep 18: Oct hold 42.4% → implied hike about 57.6%; Dec path 87.8%.
• Sep 28: Oct hike peaked near 70.9% (hold 29.1%); Dec path 93.8%.
• Oct 1: hold jumped to 75.6% after the late-September hawkish peak faded.
• Oct 14: a mid-month wobble took hold back to 66.8% (hike 33.2%).
• Oct 22: hold peaked at 94.5% (hike 5.5%) — the same session the 2-year plunged 16 bp.
• Oct 23 / Oct 26: hold 90.0% then 88.9%.
• Tue Oct 27 ~9:19 PM ET: Oct hold 91.1% / hike 8.9%. Same-evening SR1 cross-check: hold 92.2% / hike 7.8%.

That is the multi-week swing, not a day-of checklist. Monday’s desk baseline was hold 90 / hike 10; Tuesday evening settled near the same October level. We never call these numbers “CME FedWatch” — they are our calculation from fed funds futures using CME’s method, timestamped.

What happened to December Fed hike odds?

December stayed a majority while October died — with one clear wobble. On our hist path (second column), Dec spent most of late September and October in the 80s (with a brief Oct 7 dip to 72.3%), then broke to 71.1% on Oct 22 and 70.6% on Oct 23 as the front-end yield plunged. By Oct 26 it had reclaimed 76.2%. Monday’s shared baseline put at least one hike by the Dec 8–9 meeting near 81%. Our Tue Oct 27 ~9:19 PM ET ZQ calc puts the chance of at least one hike by Dec 9 near 79.1% (cumulative Dec end-range: 20.9% stay in 3.75–4.00, 72.3% to 4.00–4.25, and 6.8% to 4.25–4.50 — 72.3 + 6.8 = 79.1).

So the story into Wednesday is not “December is dead.” It is “October is mostly priced as a hold; December still carries the hike debate.” Post-decision December belongs to a separate piece after the statement — this one stops at the pre-decision path. Calendar context: next SEP meeting is Dec 8–9; every remaining 2026 date is on our FOMC meeting schedule 2026.

Why did the 2-year Treasury move with Fed odds?

Rates and odds moved together on Oct 22. U.S. Treasury par 2-year: Sep 16 4.74% → Sep 28 peak 4.92% → Oct 21 4.81% → Oct 22 4.65% (−16 bp) → Oct 23 4.69 → Oct 26 4.68 → Oct 27 4.70%. The 10-year: Oct 21 5.13 → Oct 22 4.96 → Oct 27 4.99%. That Thursday session is the same day October hold peaked at 94.5% and the Dec path bottomed near 71% — lockstep, not coincidence. The full 16 bp drop write-up is in why Treasury yields are falling; here it is one sentence of confirmation that the front end and the futures desk told the same story.

Third-party FedWatch mirrors (sanity only — not our numbers) also saw October fall into the teens and single digits while December stayed a majority: RTT News (Oct 20), CNBC (Oct 21, with a Reuters poll expecting skip-October / hike-December), and Trading Economics’ week-ahead (Oct 23/24). Kalshi’s Oct “Hike >25” last was about 1¢ in the desk snapshot — even more extreme than futures. Primary odds in this piece remain our CME-method calc.

What do Fed hike odds mean for SPX 0DTE on Oct 28?

With October hike near 9% (Tue Oct 27 ~9:19 PM ET ZQ read), the action is largely priced. Residual event risk is the vote line, the action-dependent sentence in the statement, and Warsh’s tone at 2:30 — not a surprise 25 bp hike as the base case. Kevin Warsh has chaired since May 22, 2026; the Sep 16 hike (range still 3.75–4.00%, voted 12–0) already happened under him. Wednesday is another scheduled meeting and press conference under that chairmanship — not a debut.

Tue Oct 27 cash close used across the Wednesday package: SPX 7722.6, VIX 17.52 (open 18.43), VIX1D 12.53. That VIX close sits at the low end of Goldilocks 1 (VIX 17 to 24.5); ZombieLand is below 17, Goldilocks 2 is 24.5 to 32, Chaos above 32.

Education only — structure, not a trade call. Our pack (2023-02 → 2026-10, n=29 FOMC): FOMC days exceed 1× expected move 41.4% of the time versus 24.1% on non-FOMC days (EM = prior SPX × prior VIX/100 × √(1/365)). Per our VIX term structure study, across 93 Fed decisions since 2015 VIX closed lower 54.8% of the time, about as often as on any other day, and it closed lower on none of 2026’s six Fed days so far. That is a base rate, not a forecast that IV “reliably” deflates after the presser — it doesn’t, as a rule. For the 2:00 / 2:30 / 2:45–4:00 clock and butterfly sizing by VIX regime, see the companion FOMC-day 0DTE playbook when it publishes. Live context: FOMC implied move and expected move options.

• Energy: Scheduled event risk at 2:00 and 2:30 PM ET. October action is hold-priced; language and tone still move the afternoon window.
• Premium: Let VIX price it. Know the expected move before the window; do not assume a crush after 2:30.
• Structure: Defined risk only — for example an iron condor with max loss known before entry. Size so a tag of either wing is survivable.
• Plan, don’t predict: Write two statement scenarios before 2:00: hold with steady wording, or hold with a hawkish or dovish surprise in the sentence the market keys on. We are not picking a direction. Monday’s “hold priced / December live” day map is in Fed meeting this week.

Related reading: How fed funds futures turn into rate odds · Fed meeting this week · Why Treasury yields are falling · All FOMC Alerts coverage

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