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Fed December Rate Hike Odds Hit 75% as Warsh Speech Nears
Will the Fed raise interest rates in December?
Fed December rate hike odds sit near 75% on Monday, while October odds are only 17%, after a weak September jobs report and with Fed Chair Warsh set to speak Friday.
Key numbers
| Hike odds, Dec 9 meeting | ~75%73% in prediction markets |
|---|---|
| Hike odds, Oct 28 meeting | 17%16% in prediction markets, down 5 pts in a week |
| Fed target range | 3.75%-4.00%+0.25 pts on Sep 16 |
| September jobs added | 29,000Unemployment 4.2% from 4.1% |
| 10-year Treasury yield | 5.24%+0.01 pts |
What happened
Fed December rate hike odds sit near 75% on Monday, while October odds are only 17%, after a weak September jobs report and with Fed Chair Warsh set to speak Friday. The Fed raised its main interest rate by 0.25 points to a range of 3.75% to 4% on September 16, its first hike in over three years, by a unanimous 12-0 vote. Since then, the economy added only 29,000 jobs in September and unemployment rose to 4.2%, which cooled bets on a second hike this month. Warsh is due to speak with IMF chief Kristalina Georgieva in Bangkok on October 16 (per).
Why it matters
The Federal Reserve decides how expensive it is to borrow for homes, cars and credit cards. Traders now bet it will pause in October and raise rates again in December, because hiring has slowed while inflation is still elevated. Higher rates can push borrowing costs up and weigh on stock prices. The 10-year Treasury yield, a key benchmark for mortgage rates, already stands at 5.24%.
Who this affects
- MarketmixedMedium impact
- Stock and bond investors face possible further rate pressure.
- CompanyneutralMedium impact
- Fed faces pressure to balance slowing jobs and sticky inflation.
- CompetitorsmixedMedium impact
- Bank of England likely to hike; ECB, BoJ seen holding.
- IndustrybearishMedium impact
- Mortgage borrowers and lenders face higher-for-longer rates.
Federal Reserve vs ECB, Bank of England, Bank of Japan
| Federal Reserve— | 3.75%-4.00% | Oct 28 | 17.7% |
|---|---|---|---|
| European Central Bank— | 2.50% | Oct 29 | 7.6% |
| Bank of England— | 3.75% | Nov 5 | 88.8% |
| Bank of Japan— | 1.25% | Oct 28 | 0.0% |
As of 2026-10-09
How we got here
Fed raises rates to 3.75%-4.00% by 12-0 vote, its first hike since 2023.
September jobs report shows only 29,000 added and unemployment at 4.2%.
Fed minutes show all officials backed the hike; October odds fall to 17%.
Prediction markets price 16% for an October hike, 73% for December.
What to watch
- Warsh's talk with IMF chief Georgieva in Bangkok, per reports the last Fed remarks before the quiet period.2026-10-16
- September inflation (CPI) report, the last major data before the Fed meets.2026-10-14
- Fed meetings: October 28 decision, then December 9, where a hike is favored.2026-10-28
Educational content only. Not investment advice.
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