Will the Fed decrease interest rates by 50+ bps after the October 2026 meeting?

Prediction markets put the probability at 5%: Will the Fed decrease interest rates by 50+ bps after the October 2026 meeting. Currently, markets see this as unlikely (5% YES). Cleveland Fed President Beth Hammack became the latest policymaker to warn that inflation may force the central bank to raise interest rates.

What’s Happening

Federal Reserve officials are signaling that the central bank's next move is more likely a hike than a cut, undercutting the odds that the Fed decrease interest rates by 50+ bps after the October meeting. On Friday, July 17, 2026, Cleveland Fed President Beth Hammack warned in a LinkedIn post that sticky inflation "isn't coming from only one source" and could force the committee to raise rates. Her comments capped a week in which a growing chorus of policymakers leaned hawkish, colliding directly with President Donald Trump's public campaign for lower borrowing costs. The same day, multiple top officials signaled a strict crackdown on inflation ahead of the next policy meeting. [Washington Post, Jul 17]

The hawkish pivot has been reinforced by new Fed Chairman Kevin Warsh, who took the post in May 2026 and made his first Congressional appearance on Tuesday, July 14, telling lawmakers the rate-setting committee is focused on containing price pressures. Notably, Governor Christopher Waller—who repeatedly called for credit easing last year and even dissented against the committee 12 months ago—has shifted his stance, underscoring how far the internal consensus has moved. Warsh has also overhauled the Fed's forward guidance, prompting Wall Street desks to build so-called "WarshGPT" models to parse the new communication style. Against that backdrop, a scenario where the Fed decrease interest rates by 50+ bps after the October meeting runs counter to the prevailing policy signal. [Reuters, Jul 16]

Market attention has now shifted toward the probability of a modest 25-basis-point increase rather than any easing, with analysts noting such a hike would do little to alter borrowing costs for most established businesses or major hiring and investment decisions. A half-point cut typically accompanies recession or acute financial stress—conditions absent from current data amid firm inflation prints. For the Fed decrease interest rates by 50+ bps after the October meeting to materialize, incoming CPI and employment figures would need to deteriorate sharply before the late-October FOMC decision, a reversal not currently reflected in official commentary. [Guardian, Jul 19]

Traded on Polymarket — $93K Volume

Lower-volume market on Polymarket ($93K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 5c YES.