Will the Fed Change Rates in October? Warsh Won't Preview Decision

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Will the Fed Change Rates in October? Markets Price 'No Change' at 86% After Warsh Declines to Preview Decision

The Fed is unlikely to change rates at its Oct 27-28 meeting: Polymarket's "Fed Decision in October" market priced "No change" at 86% on Oct 17. Chair Kevin Warsh told the IMF/World Bank meetings in Bangkok on Oct 16 that "I don't prejudge meetings." He gave no signal on October, and investors trimmed bets on a hike afterward, according to the Wall Street Journal.

"No change" was up from 82% three days earlier, a gain of about 4 percentage points. It is also roughly 34 points above the period low of 52%, which came when hike pricing peaked.

Live market odds

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Fed Decision in October

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

No changeIn this story

94%

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

25 bps increase

5%

Predict.funBest price18.52x5.4¢Polymarket16.67x6¢

25 bps decrease and 50+ bps increase: under 1% eachShow all

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The swing began with inflation data. September CPI ran 3.7% year over year on Oct 14, and producer prices rose 1.3% month over month, or 6.3% year over year. CME FedWatch odds of an October hike jumped from 21% to 54% after the CPI release. They eased to about 28% by Oct 15 and fell to roughly 13-15% after Warsh spoke. Warsh said only that the Fed "removed a dose of accommodation" with its September hike to 3.75%-4.00%, per FinancialMarkets.com.

The chart shows "No change" rising from 82% to 86% around Warsh's Oct 16 remarks. It shows when the move happened, not why.

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Jefferson, Williams, Waller and Daly Signal a Pause, With a Hike Possible Later in the Year

Warsh himself gave no direction, but four other officials did. Vice Chair Philip Jefferson, New York Fed President John Williams, Governor Christopher Waller and San Francisco Fed President Mary Daly each signaled little urgency to hike in October, CNBC reported. Daly told Reuters on Oct 14 that additional adjustments are more likely than not but not urgent for October, per Reuters. Their comments fit with a hold, but they do not rule out further tightening.

That pushes the tightening debate to December. The Oct 7 FOMC minutes showed that most officials expected another hike before year-end. Most also wanted more data before acting, and a weak September jobs report (+29,000) supports waiting.

The Fed enters its quiet period on Oct 17, with no scheduled speakers before the decision. CNBC still cautioned that Warsh could surprise. At 86%, about 14% of the implied probability sits on a change, and that risk persists because headline inflation is at 3.7%. Live pricing is tracked on the Fed Decision in October odds page.

The decision comes on Oct 28. A hold would confirm the market's pricing, and a hike would reverse it.