Fed October Hike Odds Rise After 3.7% CPI; Daly Sees No Urgency

The Fed is more likely than not to hold rates at its Oct 27-28 meeting, with the "No change" outcome in the Fed Decision in October market at 74% on Oct 15, but a hike is a real possibility after hot September CPI. Headline CPI rose to 3.7% year over year from 3.4%, and core came in at 2.6% against 2.5% expected. Within hours, San Francisco Fed President Mary Daly told Reuters on Oct 14 that more hikes are "more likely than not" needed, while saying she feels no urgency to move this month.

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Will the Fed Raise Rates in October 2026? Kalshi Puts a Hold at About 74-76%

The "No change" outcome traded at 74% on Oct 15, down from 84% three days earlier, a drop of about 10 percentage points. Kalshi's own October decision market showed a 25bp hike near 24%, up from roughly 20-22% before the CPI release. Cuts barely register on either venue. The policy rate sits at 3.75%-4.00% after a unanimous 25bp hike on Sept 16, per Reuters' figure; one other outlet reports a different range, so treat the level as unconfirmed.

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Fed Decision in October

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No changeIn this story

94%

PolymarketBest price1.06x94¢Predict.fun1.06x94.2¢

25 bps increase

5%

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How the September CPI and Daly's Oct 14 Comments Moved the October Fed Decision Market

The sequence ran in two legs on Oct 14. First, the CPI print sent October hike pricing sharply higher: futures briefly implied a 45-50% hike chance intraday, and Kalshi's hike contract reached about 33%. The tracked "No change" contract's period low of 52% fits that spike, a swing of about 22 percentage points to the Oct 15 reading. Forbes put the hold probability at 66% the same day.

Second, Daly pushed back. She attributed the headline jump to gasoline, called core inflation "sticky, as expected," and said she preferred a thoughtful decision over reacting to limited information, InvestingLive reported. She also called it reassuring that markets calmed after their initial reaction. CME-implied hike odds eased below 40% later that day, and the dollar reversed from an 18-month high on Oct 15.

The sources establish timing and commentary, not proof that these two events alone set the price. They do explain why the recovery stalled at 74%: Daly agreed on direction. Her view that hikes are "more likely than not" needed keeps October in play, and September minutes released Oct 7 showed most participants expect one more hike by year end without naming a meeting.

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What Could Move the Fed's October Decision Odds Next

Chairman Kevin Warsh's IMF remarks in Bangkok were flagged as the last Fed-official commentary before the pre-meeting blackout. A hawkish tone from Warsh would challenge Daly's patience; an echo of "no urgency" would support a drift back toward 84%. Chicago Fed President Austan Goolsbee has struck a more anxious tone, a reminder that officials split on timing.

Oil is the other swing factor. Daly tied headline inflation directly to gasoline, and InvestingLive noted that a further crude surge linked to the Iran war would test her case for waiting. If the hold holds near 74-76% into the meeting, the CPI scare has been absorbed; renewed hike pricing would signal it has not. Track the live Fed Decision in October market as those signals arrive.

The question resolves with the FOMC statement on Oct 28 at 2 p.m. ET. InvestingLive expects Daly's stance to trim October hike odds without denting expectations for a December increase.