Three weeks after the Federal Reserve raised interest rates for the first time since 2023, prediction market traders are pricing a pause at the next meeting. As of October 8, 2026, the October contract for a hold is quoted at 89%, while a hike of up to 25 basis points sits at 17%. The December contract shows a different picture.
Key Takeaways
- Prediction markets indicate an 89% chance the Fed will hold rates in October 2026, with only a 17% chance of a small hike.
- The Fed raised rates to 3.75%-4.00% in September, with projections suggesting at least one more increase this year.
- For the December meeting, the hold is priced at 27%, significantly lower than October’s prices, as new projections will be released.
- Traders will closely watch inflation data, the Beige Book, and Fed speeches leading up to the next meeting on October 28.
- Overall policy indicates a reset expectation with the Fed’s median projection pointing towards one more increase in 2026.
Table of contents
What’s Changed Since September
On September 16, the Federal Open Market Committee voted 12-0 to raise the target range for the federal funds rate by a quarter point to 3.75% to 4.00%. The increase followed five straight meetings at 3.50% to 3.75%, the range set in December 2025.
The Fed’s statement said inflation remains elevated and described the increase as supporting a timelier return to its 2% goal. Updated projections lifted the median year-end 2026 rate to 4.1% from 3.8%, and 16 of 18 participants projected at least one more increase this year.
Minutes from the September meeting, released October 7, added detail. All participants viewed a higher target range as appropriate, and a couple said they had raised their estimate of the neutral rate.
October 2026: Where the Market Stands with the Federal Reserve
The next decision comes at the October 27-28 meeting, with the statement due at 2:00 p.m. ET on October 28. This meeting does not include new economic projections.
The Fed interest rate decision markets on Fanatics Markets, a prediction markets platform within the Fanatics ecosystem, split each meeting into event-based Yes/No contracts by outcome. For October, as of October 8, 2026:
- 0bps (Unchanged): 89%, with a $100 position showing a $112 return
- Hike <=25bps: 17%, with $100 showing $588
- Cut <=25bps: 4%, with $100 showing $2,500
- Cut >25bps: 2%, with $100 showing $5,000
Taken together, the board leans toward a hold in October. A hike is the main alternative, and both cut outcomes carry low prices.
December and January: Further Out
The December 8-9 meeting brings a fresh dot plot. The Unchanged contract for that meeting is quoted at 27% ($100 showing $370), well below October’s 89%, and a cut of up to 25 basis points at 7% ($100 showing $1,429). The Fed’s September projections pointed to one more increase this year.
For the January 26-27, 2027 meeting, Unchanged is quoted at 69% 69% ($100 showing $145) and a cut of up to 25 basis points at 6% ($100 showing $1,667). Each meeting’s contracts measure the change at that meeting alone. January’s “Unchanged” therefore means no further move from wherever December leaves rates.
What Traders Are Watching
- Inflation and jobs data before October 28. The Fed has said future decisions will depend on incoming data, and prices on the October and December contracts can shift around those releases.
- The Beige Book on October 14. The Fed’s regional survey of business conditions is the last broad economic read before the October meeting.
- Fed speeches. Comments from officials can shift prices until the pre-meeting blackout period begins.
- The December dot plot. The next set of projections will show whether the committee still expects a second increase in 2026.
How These Contracts Settle with the Federal Reserve
Each outcome trades as a separate event contract. If the outcome a contract describes happens, it returns $1 per contract; if it does not, it returns nothing. The board shows payouts for a $100 position. At a 17% price, for example, $100 buys enough contracts to return $588 if a hike of up to 25 basis points occurs.
A market settles once the outcome is determined after the Fed’s announcement. The contract rules also cover unusual cases. If an event is cancelled, open positions settle at the volume-weighted average price, which can return more or less than the amount paid. Resolution details can differ between markets, so the rules for each contract are worth reading before taking a position.
How to Read These Prices
Each percentage is the quoted price of that outcome’s Yes contract, not a strict probability. Every outcome is quoted separately at its buy price, which is why the four October outcomes shown add up to more than 100%. The payouts shown are before fees. Prices can move quickly around inflation data releases and Fed communications, as they do in other rate-sensitive markets, so any snapshot reflects a single point in time.
Key Outcomes
- October 2026: a hold is quoted at 89%, with a hike of up to 25 basis points at 17%.
- December 2026: a hold is quoted at 27%, at the meeting that brings new projections.
- January 2027: a hold is quoted at 69%, measured from wherever December leaves rates.
- Policy backdrop: the target range stands at 3.75% to 4.00%, and the Fed’s median projection points to one more increase in 2026.
Conclusion
The September hike reset expectations for the rest of 2026. As of October 8, the board’s highest-priced October outcome is a hold, while a December hold is priced far lower, at the meeting where the Fed updates its projections. Between now and October 28, inflation and jobs reports, the Beige Book and Fed speeches give traders the main inputs to watch. Because prices respond to each of these releases, the figures in this update reflect a single snapshot and will change as new information arrives.
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Federal Reserve FAQs
When is the next Fed interest rate decision?
The FOMC meets October 27-28, 2026, with the decision and statement due at 2:00 p.m. ET on October 28. The following meetings are December 8-9, 2026 and January 26-27, 2027.
What does “0bps (Unchanged)” mean?
It means the Federal reserve leaves the target range where it is at that meeting. Each contract measures the change at a single meeting, not the change from today’s range.
What does the percentage on each outcome mean?
It’s the quoted price of that outcome’s Yes contract. A $100 position at that price returns $100 divided by the price if the outcome occurs, before fees.
Why do the October outcomes add up to more than 100%?
Each outcome is quoted separately at its buy price, so the figures are not a single probability split across outcomes.
What happens if a meeting is cancelled?
The contract rules govern. If an event is cancelled, open positions settle at the volume-weighted average price, which can return more or less than the amount paid.
Who can trade these contracts?
Eligibility is limited to US residents aged 21 and older, and availability varies by state.
