Nine days from now, the Federal Reserve is expected to do nothing, and markets are treating that like a cliffhanger. The Fed’s October meeting is nine days away, and traders are betting that nothing happens. After September’s surprise Fed rate hike, the central bank looks ready to sit still. Even so, officials say another increase is probably coming before New Year’s.
Here is the setup. On Sept. 16, the Fed raised its benchmark rate by a quarter point, to a range of 3.75% to 4%. That comes according to its official statement. It was the first hike since July 2023, and the vote was 12-0.
What the Fed’s minutes say about another rate increase
The Fed released the minutes of that meeting on Oct. 7, and they were more pointed than the decision itself. Every participant backed the September hike. Beyond that, “most participants” saw another rate increase as likely appropriate by year-end, per a summary of the minutes.
That is not a promise. It is a warning label.
Why the October Fed rate decision looks like a pause
The expected next move is no move. The Associated Press reports that key policymakers have said the Fed can take time to watch the economy. They want to see how September’s hike plays out before acting again. Futures pricing agrees.
The odds tell the same story, with a caveat. They come from a prediction market and a broker blog, not from the Fed. Kalshi’s page showed roughly an 86% to 88% chance of a hold at the October meeting, and under 1% for a cut. Meanwhile, estimates of a second hike at that meeting ran around 16% to 20% in early and mid-October.
Most sources put the decision on Oct. 28 at 2 p.m. Eastern. However, the AP’s minutes story says Oct. 28-29. I could not confirm the exact schedule against the Fed’s own calendar, so treat the date as likely rather than locked.
Chair Warsh has also said little about what comes next. Our look at Warsh calling AI a shock without signaling a rate move shows how guarded he has been. (Poker players call this a tell-free zone.)
Here’s the thing about your borrowing costs
If you were hoping the Fed would pull your mortgage rate down, read this part twice. The AP reports that longer-term rates for mortgages and other borrowing have jumped in recent months. It also says the Fed rate hike has likely played only a limited role. Other forces are pushing too: government debt, tech companies borrowing for data centers, and oil and gas prices.
So even a Fed on pause does not mean borrowing gets cheaper. The Fed sets one short-term rate. The market sets the rest, and the market is not in a generous mood.
The next dates on the calendar
After October comes Dec. 9, which falls inside that “by year-end” window the minutes describe. If most officials meant what they said, that is the meeting to circle. A hold on Oct. 28 would not cancel the second hike. It would just push the argument down the calendar.
The reasoning behind the whole campaign has not changed. Chair Kevin Warsh put it bluntly after the September vote: “The plain fact is that inflation is too high and has been for too long.” Energy prices tied to the Iran war have been a big driver. Meanwhile, President Donald Trump has long demanded lower rates, and he has renewed his attacks on the Fed since the hike.
I could not confirm any new Fed speaker comments from the past few days. So the signals above are the latest on the record. For now, the Fed’s message is simple: one hike down, probably one to go, and no rush to say when.
Markets have nine days to practice reading a very quiet room.
