Fed December Hike Odds Hold After Weak Jobs, Pause-Hike-Pause at 59%

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Will the Fed Hike Rates in December 2026? Pause-Hike-Pause Odds Jump to 59%

Yes, markets still lean toward a December hike. In Polymarket's Fed decisions (Oct-Jan) market, Pause-Hike-Pause rose from 40% to 59% in three days, a gain of about 19 percentage points, and traded at 59% as of Oct. 18. After the U.S. added only 29,000 jobs in September, CME's FedWatch put October hike odds at 17%, while a December increase stayed priced above 75%.

Live market odds

2 venues

Fed decisions (Oct-Jan)

Each outcome's chance, from what traders are paying right now on Polymarket and Predict.fun.

Pause-Hike-PauseIn this story

58%

Predict.funBest price1.75x57¢Polymarket1.67x60¢

Hike-Hike-Hike

2%

PolymarketBest price45.45x2.2¢Predict.fun25.00x4¢

Pause-Pause-Pause

9%

Predict.funBest price10.00x10¢Polymarket9.09x11¢

Other

4%

PolymarketBest price33.33x3¢Predict.fun14.29x7¢

Compare every venueCents per $1 payout, before fees

Payrolls fell short of estimates above 80,000. FedWatch October hike odds were down from close to 36% a week earlier. On Kalshi, October hike odds fell to 18% from almost 70% a week earlier, CNBC reported on Oct. 2, 2026.

The Pause-Hike-Pause outcome pays if the Fed holds at the Oct. 27-28 meeting, raises rates at the Dec. 8-9 meeting and holds again at the Jan. 26-27, 2027 meeting.

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Inflation data also pulled October hike odds lower. CNBC reported that a softer-than-expected inflation report came out two days before the jobs data: August core PCE at 3.0%, below the 3.3% expected. Reuters reported that Fed officials were leaning toward skipping October to gather more data, while the December hike stayed on the table.

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What Could Confirm or Reverse the Pause-Hike-Pause Path

The Fed raised its target range by 25 basis points to 3.75%-4.00% at the September meeting, according to the FOMC statement. The September minutes showed that most participants saw another hike by year-end as likely appropriate. However, Reuters noted that policymakers were divided on the reasoning, and several viewed policy as only mildly restrictive or not restrictive at all. That split is the main risk to the trade: a committee unsure policy is tight enough could move sooner, or delay further.

The Oct. 27-28 meeting is the first test. A pause confirms the first leg of the path. A hike breaks it outright.

The December meeting is the second test. FedWatch pricing of a December hike above 75% is the benchmark to watch, and a sharp drop would undercut the "Hike" leg. Reuters flagged the October CPI release as a key swing factor. The next jobs and inflation reports will show whether the September labor weakness persists.

These figures describe market pricing, not a Fed commitment. Chicago Fed President Austan Goolsbee said inflation remains the problem and called the next move "open." The cited reporting does not explain the repricing beyond the jobs and inflation data. Live prices across every path are on the Fed decisions (Oct-Jan) odds page. The next decisive event is the Oct. 28 rate decision.