Will the Fed increase interest rates by 25 bps after the October 2026 meeting?

Prediction markets put the probability at 18%: Will the Fed increase interest rates by 25 bps after the October 2026 meeting. Currently, markets see this as unlikely (18% YES). A July rate hike from the Fed? Chances that the Federal Reserve will hike rates at its July meeting are rising.

What’s Happening

Rate-hike expectations have climbed sharply in mid-2026 as inflation pressure persists. CME's FedWatch tool now estimates a 46.5% probability that the Federal Reserve raises its benchmark rate by 25 basis points at the July 29 meeting, up from lower odds earlier in the month, with the shift driven largely by a jump in oil prices tied to escalating U.S.-Iran tensions. That near-term repricing directly informs the question of whether the Fed increase interest rates by 25 bps after the october meeting, since a July move would front-load tightening and could reduce the need for a later hike. Federal Reserve Governor Christopher Waller said on July 13 that policy stands at a "crossroads" and that rates may need to rise "in the near term" if incoming data show inflation staying well above the 2% target. [CNBC, Jul 13]

The data calendar is decisive. Waller told the New York Association for Business Economics he would lean "heavily" on inflation prints, beginning with the CPI report due Tuesday, July 14. Not all officials share the hawkish lean: minutes from the latest FOMC meeting reflected a balanced committee, and Commerzbank forecasts the fed funds rate holding near 3.75% through early 2027 before easing to 3.50%, arguing markets are overpricing further tightening and that the next major move points downward. The last time the Fed hiked into rising energy prices, it extended a tightening cycle rather than pausing, which is why the October horizon remains contested. [Commerzbank/Bitget, Jul 11]

Attention now turns to new Fed Chair Kevin Warsh, whose Congressional testimony this week is expected to signal direction. Whether the Fed increase interest rates by 25 bps after the october meeting will hinge on the summer inflation trajectory, labor-market resilience, and the path of oil. With markets currently pricing a downward bias into 2027, an October hike would require a sustained upside inflation surprise rather than a single hot print. The verdict on whether the Fed increase interest rates by 25 bps after the october meeting stays open until the July decision and August-September data clarify the trend. [Crypto Briefing, Jul 13]

Traded on Polymarket — $55K Volume

Lower-volume market on Polymarket ($55K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 18c YES.