Market pricing suggests the Federal Reserve is unlikely to raise rates in October, with futures implying a 17% probability of a hike at the next FOMC meeting. Expectations for further tightening have cooled from recent hawkish peaks as implied policy rates further out the curve have edged lower, even after firmer CPI and PPI prints.
Inflation is still characterised as largely supply-driven—such as airfares—or tied to sector-specific pricing dynamics in personal services, housing and health care rather than the stance of monetary policy. The next plausible window for a move is framed as December, with that increase seen as the final hike of the cycle. Further along the curve, the implied federal funds rate for December 2027 stands at 4.64%, which points to just under 75bp of additional hikes, down from a peak of 100bp priced previously, including September, as base effects in March and April 2027 are expected to lower annual inflation.
Perspective On Macro Framing And Rate Hike Cycles
Let’s do a quick query to ensure accurate macro framing / stats on rate hike cycles.
Relevant Fed Funds Search Queries And Framing
**Final Search Queries**
* Fed funds futures rate probability pause historical data CPI base effects
Let’s craft search query if needed, but since date is 2026, let’s keep stats grounded in standard Fed Funds futures market stats (e.g. 17% probability of hike, terminal rates, 75 bps total hikes expected, CPI/PPI numbers, SOFR/Treasury yield movements).
Start trading now — click here to create your real VT Markets account.
