On Wednesday, September 16, 2026, television stations broadcast Federal Reserve Chairman Kevin Warsh speaking after a Federal Open Market Committee (FOMC) meeting while working as a trader on the floor of the New York Stock Exchange (NYSE) in New York, USA.
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Investors now think it’s highly unlikely the U.S. Federal Reserve will raise interest rates again in October after September’s weaker-than-expected jobs report.
CME’s FedWatch tool, based on 30-day interest rate futures contracts, shows there is only a 17% chance the Fed will raise rates by a quarter of a percentage point. A week ago, the odds were close to 36%. Prediction market platform Karshi puts the probability of an October rate hike at just 18%, down from about 70% a week ago.
The U.S. economy added just 29,000 jobs in September, less than expected to add more than 80,000 jobs. The Fed raised rates at its September meeting to combat inflation, which has been above target for five years, but the softening labor market could recalibrate the Fed’s thinking on how to balance its dual mandate of ensuring full employment and price stability.
The odds of an October rate hike also fell midweek after Wednesday’s release of the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditure Price Index, showed lower-than-expected prices. Core prices, excluding food and energy, rose 3% in August, below the consensus estimate of a 3.3% rise.
“This report confirms the need for the Federal Reserve to continue to be patient,” said Adam Schickling, senior economist at Vanguard. “While the labor market has not deteriorated sharply, there is also little evidence that it has strengthened meaningfully, giving policymakers reason to wait for additional data.”
Traders currently think an October rate hike is unlikely, but still expect the central bank to raise rates in December.
FedWatch puts the odds of a December rate hike at over 75%, while Calci puts the odds of the Fed raising rates at 65%.
The Fed is scheduled to announce its next decision on interest rates at the end of its two-day policy meeting on October 28th.
— CNBC’s Michelle Fox contributed reporting
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
