Will the Fed raise interest rates at its October 27-28, 2026 meeting?
We put the chance the Fed raises rates on October 28, 2026 at 68%, as of September 26. The biggest reason: 16 of 18 officials project another hike this year and a voting governor says more is needed. We sit below the 77.5% futures price because the same hike could come in December, after the midterms.
Why it matters: A second straight hike, six days before the midterms, would push mortgage, credit card, auto loan and small business borrowing costs higher while testing whether a Trump-appointed Fed chair will defy the White House twice in a row.
TPG forecast
68%
Likely
Hike, but December is a real alternative
Version 1: 68% (range 55% to 80%) · Kalshi 66%
Evidence cutoff Sep 26, 2026 · published Sep 26, 2026 · Likely hike, but December is a real alternative
This forecast is on its first version. Each update adds a point; old versions are never edited.
The numbers behind the call
77.5%
CME FedWatch odds of an October hike on September 24, up from about 53% a day earlier[2]
16
of 18 Fed officials project at least one more hike in 2026[3]
12
FOMC voters who all backed the September hike, with no dissent[1]
162,000
jobs added in August, the report that preceded the hike[5]
75
basis point hike the Fed delivered days before the 2022 midterms[6]
7.03%
average 30-year fixed mortgage rate on September 24, 2026[7]
What it means for you
Homebuyers and homeowners with adjustable loans
The 30-year fixed mortgage rate already averages 7.03%, up from 6.30% a year ago. Another hike tends to keep long rates elevated, and adjustable-rate mortgages and home equity lines reset directly off short-term rates.
Credit card and car loan borrowers
Card APRs are tied to the prime rate, which moves one for one with the Fed's range. A 0.25 point hike adds about $25 a year in interest for every $10,000 of revolving balance, and new auto loan quotes typically follow within weeks.
Savers
High-yield savings accounts, money market funds and new certificates of deposit usually reprice upward after a hike, so cash yields would rise modestly.
Small businesses
Lines of credit and SBA variable-rate loans are priced off prime, so a hike raises the monthly cost of working capital at the same time fuel and shipping costs are climbing.
Retirement accounts
Thirty minutes after Fed Chair Kevin Warsh's September 16 press conference ended, the S&P 500 was down 1% and the 10-year Treasury yield had climbed back to 5%. A second hike would reinforce higher yields, which pressures stock and bond prices in 401(k) balances.
The read
Three lenses, always in this order. How the method works.
01
Psychology
What do the decision makers need?
Kevin Warsh needs to prove he is not the White House's chair. He was nominated by President Trump, who has demanded rates of "1%, or less," and on September 16 Trump told reporters he had told Warsh "you might as well vote with the board" because "he doesn't have the votes." That remark makes a pause costly for Warsh: if the Fed holds in October, markets will ask whether the president put a finger on the scale. A second hike is the cleanest way to settle the independence question, and his "dose of accommodation" framing gives him room to keep going without calling it a new tightening cycle.
The committee's incentive runs the same way. Governor Michael Barr, a voter, said the Fed was "out of position" and that further adjustments are likely needed, and regional presidents Musalem and Collins have leaned the same direction. The counter-incentive is institutional face on the calendar: October 28 is six days before the November 3 midterms, and a Fed that prizes looking apolitical may prefer to move on December 9, when no election is in sight. New York Fed President John Williams, the committee's vice chair, chose the words "by the end of the year," not "in October."
The White House's record is loud pressure without follow-through on the Fed itself. Trump threatened on September 4 to stop trading with countries that run surpluses with the U.S. unless the Fed cut, then praised Warsh personally after the hike. Threats aimed at the Fed have so far changed the noise level, not the votes.
02
History
What happened the last times this came up?
Reference class: every rate hike since 2004, read from the Fed's own rate-change history, and whether the very next scheduled meeting also hiked. In 2004 to 2006 the answer was yes 16 of 17 times. In 2015 to 2018, when the Fed moved roughly once a quarter, it was 0 of 9. In 2022 to 2023 it was 9 of 11. Pooled, 25 of 37 hikes, or 68%, were followed immediately by another. The first hike of a cycle was followed by a second at the next meeting in 2 of 3 cycles.
Closest analogue on political timing: November 2, 2022, when the Fed raised rates 75 basis points six days before a midterm election, with inflation high and a unanimous committee. The Fed has shown it will hike into an election when it believes inflation demands it. The closest analogue on political pressure is 2018: after a September hike under public attack from President Trump, the Fed skipped the meeting right after the midterms and hiked again in December.
Where the analogies break. In 2022 core inflation was far above target; today core CPI is 2.4%, its lowest since 2021, and the case rests on headline energy prices, hot business surveys and strong hiring. In 2018 only every other meeting had a press conference, which pushed moves to quarterly meetings; every meeting is now live. And no prior chair was nominated by a president who publicly claimed to have discussed the vote with him beforehand.
03
Statistics
Base rate, adjustments, the number.
Start at the 68% base rate from the 37 hikes since 2004. The market starts higher: CME FedWatch put October at 77.5% on September 24, and Kalshi traders price a 25 basis point hike at about 64% plus 2% for a larger move, so markets sit between 66% and 78%.
Adjustments. Up 5 points for the data: August payrolls of 162,000 were nearly triple expectations, S&P Global's September business surveys hit multi-year highs with the steepest input cost rise in four years, and the Iran peace plan rejection keeps oil high into the October 14 CPI report. Up 3 points for Warsh's independence incentive after Trump's remarks. Down 5 points for timing: the median dot shows exactly one more hike in 2026, and December is equally consistent with that. Down 3 points for the six-day proximity to the midterms and a vice chair who pointedly said "by the end of the year."
68 plus 5 plus 3 minus 5 minus 3 lands at 68%. The range of 55% to 80% reflects two data releases that can swing it: the September jobs report on October 2 and September CPI on October 14. The market moved from roughly 51% to 77.5% in one week, which shows how sensitive this call is to each print.
Between the lines
What people spent versus what they said, and what was left out.
What was left out
The September 16 statement dropped any forward guidance. It ended with "The Committee will deliver price stability" and said nothing about the extent or timing of further moves.
Leaving out the usual guidance keeps both October and December open and lets Warsh avoid a pre-commitment the White House could attack in advance. Williams later called the era of explicit guidance "over." It raises the chance of a surprise in either direction relative to a normal Fed.
Tone shift
Warsh repeatedly called the hike removing "a dose of accommodation" and said the neutral rate has no operational effect on today's decisions.
Calling current policy still accommodative at 3.75% to 4% is hawkish: it implies the Fed is not yet restraining the economy, so there is no natural stopping point after one more step. That framing argues for October over December.
Sequencing
Barr, a voting governor, said on September 23 that further adjustments are likely needed; Williams, the vice chair, said the next day another hike is reasonable "by the end of the year."
The Board voice pushes October; the leadership voice leaves the calendar open. When the chair's closest lieutenant declines to point at the next meeting, a December move remains live, which is why we sit below the futures price.
Cheap talk
Trump said Warsh doesn't have the votes and called the committee "very hostile" but praised Warsh personally and did not threaten his job.
The pressure is rhetorical and aimed at the committee, not the chair. It raises the reputational cost of a pause for Warsh without creating any mechanism to stop a hike.
Our number after adjusting the base rate for what is different this time: 68%. It sits inside the historical interval.
Check our statistics yourself
- Reference class
- 25 of 37 (68%)
- Exact 95% CI (Clopper-Pearson)
- 50.2 to 82.0%
- Bayesian 95% credible (uniform prior)
- 51.3 to 80.4%
- Binomial test of our 68%
- p = 1.000
Our 68% sits inside the historical interval: the forecast is consistent with how cases like this have gone.
Reproduce in JASP (free, jasp-stats.org)
- Download base-rate.csv (one row per case in the reference class, outcome 1 or 0) and open it in JASP.
- Frequencies, then Binomial Test. Variable: outcome. Test value: 0.68. Tick Confidence interval. JASP reports the same p value and Clopper-Pearson interval shown here.
- Frequencies, then Bayesian Binomial Test, with a Beta(1, 1) prior. The posterior 95% credible interval matches ours.
Reference class: Computed by TPG from the Federal Reserve's published list of every target rate change (2004 to 2006, 2015 to 2018, 2022 to 2023 hiking cycles), counting whether each hike was followed by a hike at the next scheduled FOMC meeting.
Base rate
68%
of Fed rate hikes since 2004 were followed by another hike at the very next meeting (25 of 37)[6]
Computed by TPG from the Federal Reserve's published list of every target rate change (2004 to 2006, 2015 to 2018, 2022 to 2023 hiking cycles), counting whether each hike was followed by a hike at the next scheduled FOMC meeting. (n = 37)
Closest historical parallels
Hike six days before the 2022 midterms (2022)
Alike: Inflation above target, unanimous committee, a meeting days before a national election; the Fed hiked 75 basis points on November 2.
Outcome: The Fed hiked and kept hiking at the next meeting in December.
Where it breaks: Core inflation was far higher in 2022 and the Fed was far behind; today core CPI is 2.4% and the push comes from energy and overheating signals.
Pause after the 2018 midterms under presidential attack (2018)
Alike: The Fed hiked in September while President Trump publicly attacked the chair he had appointed, then faced a meeting right around a midterm election.
Outcome: The Fed held at the November 8 meeting two days after the midterms and hiked again in December.
Where it breaks: In 2018 the Fed moved only at meetings with a press conference, roughly quarterly. Every meeting is now live, and the 2026 meeting falls before the election, not after.
One-and-done hike of 1997 (1997)
Alike: The Fed raised rates once in March 1997 on overheating fears.
Outcome: It did not hike again; the next move was a cut in September 1998.
Where it breaks: Schwab notes it was the last true one-and-done hike, and 16 of 18 officials today already project more tightening.
How it could play out
Every path we see, sized by probability. Paths that resolve YES add up to our 68%.
- Back-to-back quarter point hike Yes65%
September payrolls stay above 100,000 and September CPI comes in at or above 3.6% on energy, confirming Warsh's overheating read.
- Hold until December No30%
A soft jobs report or a benign core CPI lets the committee wait until after the midterms, consistent with Williams' 'by the end of the year' wording.
- Half point hike Yes3%
Oil spikes after renewed strikes on Iran and core inflation jumps, pushing the committee to catch up faster.
- Cut or hold under market stress No2%
A sharp market sell-off or financial accident forces the Fed to stand down entirely.
What would change our number
September jobs report on October 2 above 150,000 with unemployment at or below 4.1%
+6 pointsSeptember CPI on October 14 at 3.7% or higher year over year, or core above 0.3% for the month
+8 pointsWarsh or Williams says the committee can be patient or that December is a natural checkpoint
-15 pointsA U.S.-Iran deal reopens the Strait of Hormuz and Brent falls below $90
-8 pointsTrump moves to fire or formally rebuke a Fed official, or announces trade cutoffs tied to rates
+4 points, as the committee closes ranksTPG 68% vs Kalshi 66%
We roughly match Kalshi (64% for a quarter point plus 2% for a larger hike) and sit about 10 points below CME FedWatch's 77.5% from September 24. Futures price the likelihood that rates are higher by the end of October, and with 16 of 18 officials projecting another 2026 hike that is well supported. We shade below futures because the dot plot does not choose between October and December, the vice chair avoided naming October, and the meeting falls six days before the midterms.
Market price recorded September 26, 2026 from Kalshi. Analysis, not investment advice.
How this question resolves
Resolves YES if the Federal Open Market Committee statement released at the conclusion of its October 27-28, 2026 meeting raises the target range for the federal funds rate above the current 3.75% to 4.00% range, by any amount. Resolves NO if the range is left unchanged or lowered. If the meeting is rescheduled, the first scheduled FOMC decision after October 26, 2026 counts. An unscheduled intermeeting hike before October 27 also resolves YES.
Closes: October 28, 2026. Judged by: Federal Reserve Board FOMC statement and implementation note on federalreserve.gov
Questions people ask
Will the Fed raise rates in October 2026?
+
Probably. As of September 26, 2026, TPG puts the chance of a hike at the October 27-28 meeting at 68%. The Fed raised rates to 3.75% to 4% on September 16 in a 12-0 vote, 16 of 18 officials project another hike this year, and CME futures priced October at 77.5%. The main reason it is not higher is that the same one extra hike could come on December 9 instead, after the midterms.
Is the Fed going to cut rates before the election?
+
Almost certainly not. The Fed is now raising rates, not cutting, because headline inflation is 3.4% and rising on gasoline prices. Kalshi traders price the chance of an October cut at about 1%. President Trump has demanded rates of 1% or less, but the committee voted unanimously to hike in September, and the realistic choice in October is between a hike and a pause.
Why did the Fed raise rates in September 2026?
+
The Fed said inflation remains elevated and that the hike will support a timelier return to its 2% goal. Chair Kevin Warsh described it as removing a dose of accommodation because the economy strengthened: August payrolls rose 162,000, business surveys hit multi-year highs, and oil prices climbed on the Iran war and the closure of the Strait of Hormuz. It was the first hike since 2023.
What does a Fed rate hike mean for mortgage rates?
+
Mortgage rates follow the 10-year Treasury more than the Fed's overnight rate, but hikes push both up. The 30-year fixed mortgage averaged 7.03% on September 24, 2026, up from 6.30% a year earlier, and the 10-year yield touched 5% after the September decision. Adjustable-rate mortgages and home equity lines reset directly off short-term rates, so they rise with each hike.
Can Trump stop the Fed from raising rates?
+
Not directly. Rate decisions are made by a 12-member committee, and Trump's own pick, Kevin Warsh, voted with all 11 colleagues to hike in September. Trump has pressured the Fed publicly and threatened to cut off trade with surplus countries unless rates fall, but those threats have not changed any votes so far. A pause in October would raise questions about political influence, which gives Warsh a reason to keep moving.
Sources
Every source is dated on or before the September 26, 2026 evidence cutoff. Nothing published later was used.
- [1]Trump says he told Warsh to vote for hike with the rest of Fed board: 'It's not going to matter'. CNBC, Sep 16, 2026.
“The decision by the 12-member Federal Open Market Committee to raise benchmark interest rates to a target range of 3.75% to 4% was unanimous.”
- [2]New York Fed's Williams says it's 'reasonable' to expect another rate hike by year-end. CNBC, Sep 24, 2026.
“FedWatch tool put the probability of an October raise at 77.5% on Thursday, up from around 53% on Wednesday.”
- [3]Will the Fed Hike Again in October? Dot Plot Median Points to One More Hike This Year. TradingKey, Sep 17, 2026.
“Based on this, 16 officials expect at least one more rate hike this year.”
- [4]Federal Reserve issues FOMC statement, September 16, 2026. Board of Governors of the Federal Reserve System, Sep 16, 2026.
“Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.”
- [5]Fed Hikes in 12-0 Vote, Commits to Inflation Fight. Charles Schwab, Sep 16, 2026.
“Instead, August jobs growth announced early this month was a solid 162,000.”
- [6]Open Market Operations: FOMC target federal funds rate changes. Board of Governors of the Federal Reserve System, Sep 16, 2026.
“December 15 50 0 4.25-4.50 November 3 75 0 3.75-4.00”
- [7]Primary Mortgage Market Survey. Freddie Mac, Sep 24, 2026.
“The 30-year fixed-rate mortgage averaged 7.03% as of September 24, 2026, up from last week when it averaged 6.95%.”
- [8]Market sees next Fed hike in October, following Barr comments and hot inflation reading. CNBC, Sep 23, 2026.
“In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion”
- [9]Three words from Kevin Warsh have Wall Street wondering how far the Fed will go with rate hikes. CNBC, Sep 18, 2026.
“by a quarter percentage point not specifically as a tightening of policy but rather as removing”
- [10]Kevin Warsh just defied Donald Trump. Now what?. CNN Business, Sep 17, 2026.
“Trump raised eyebrows on Wednesday evening by appearing to suggest that he gave Kevin Warsh, his handpicked Fed chairman, permission to raise rates”
- [11]Iran awaits US move after WSJ report says Trump rejects peace plan. Reuters via Cyprus Mail, Sep 26, 2026.
“he told his staff that he sees a renewed bombing campaign as likely”
- [12]Trump threatens to halt trade with top partners unless Fed cuts rates. CNBC, Sep 4, 2026.
“President Donald Trump demanded that the Federal Reserve slash interest rates or else he will cut off trade with countries with which the U.S. maintains trade deficits.”
Version history and integrity
Published forecasts are never edited. When the evidence changes we publish a new version beside the old one, each locked with a sha256 hash of its full contents. When this question resolves it is scored in public on our track record.
| Version | Cutoff | Forecast | Lock hash |
|---|---|---|---|
| v1 | Sep 26, 2026 | 68% Likely | c83769fa0444de7d845f945761344ea21f3057066f08c04573dd576f17d2ec5c |
Download every forecast: JSON or CSV (CC BY 4.0). Public sources only. Analysis, not investment or legal advice.
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