Fed Weighs Another Rate Hike on Oct. 28 as Hot Inflation Report Shifts the Odds
Markets put the odds between 44% and 52%; Fed officials are divided on how much more tightening is needed.
The Federal Reserve meets October 28, and after a hotter-than-expected inflation report, investors think another interest-rate increase is close to a coin flip. The Fed raised its short-term rate target to 3.75%-4% last month.
Axios, citing the CME FedWatch tool, reported that odds of an October hike jumped to 44% from 22% the day before; the Spokesman-Review put the odds at about 52% after the report. The differences reflect different snapshots on the same day, not different facts.
Fed officials sounded divided. Governor Christopher Waller told Bloomberg that higher Treasury yields are already restraining economic activity, which may reduce the urgency of another hike this month. New York Fed President John Williams said one more increase might come this year but that the Fed might not need to raise rates again in 2027. Cleveland Fed President Beth Hammack said inflation pressures extend beyond energy, citing tariffs, AI investment, and rising services prices. Economist Bill Adams of Fifth Third Bank said the hot report raises the odds of another hike if energy supply disruptions persist into 2027.
Outside the Fed, former Deputy Treasury Secretary Michael Faulkender argued against a hike ahead of the Oct. 28 decision, according to Fox News.
Why it matters: higher rates make mortgages, car loans, and credit cards more expensive at the same time prices are rising faster than paychecks. If the Fed hikes, it is betting that the war-driven energy shock will spill into the rest of the economy; if it waits, it risks being behind. We will report the decision on October 28.
- Axios: Inflation heats up as gas prices surge
- Spokesman-Review: Energy, gas costs push inflation higher
- Fox News live blog: Midterm elections 2026, Oct. 18
Facts above are attributed to the linked reporting. Statements in a source's own opinion section are labeled as commentary. We correct errors promptly.
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