Will the Fed raise interest rates at its October 27-28, 2026 meeting?

Kevin Warsh still needs to show he is not the White House's chair, but the September data gave him a way to pause that cannot be read as a favor to the president. A hold after a jobs report this weak is defensible on the numbers alone, and holding until December 9 keeps the projected extra hike intact while moving it past the November 3 midterms. The independence incentive we leaned on in September now argues for a hike that is announced as data dependent, not for one rushed into October.

The committee's leadership has already signaled the choice. On September 29, five days after calling another hike reasonable by the end of the year, New York Fed President John Williams said at the University at Buffalo that the September move left no need for urgency, as Reuters and other outlets reported. The vice chair rarely walks markets off a meeting by accident. Governor Barr's case for further adjustments has not been withdrawn, but it now reads as a case for December.

The White House record is unchanged: loud pressure for lower rates with no mechanism to stop a hike. On Iran, the Associated Press reported on October 8 that Trump posted that the U.S. will not resume military strikes before the midterm elections and called the talks productive. That pledge removes most of the risk of a fresh oil shock landing before the October 28 decision.

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. Pooled, about two thirds were followed immediately by another (our calculation from the Fed's table). The split by cycle is what matters now: the fast cycles of 2004 to 2006 and 2022 to 2023 almost always hiked again at the next meeting, while the gradual cycle of 2015 to 2018, when the Fed signaled roughly one move a quarter, never did.

Closest analogue is now 2018, not 2022. After a September hike under public attack from President Trump, the Fed skipped the meeting nearest the midterms and hiked again in December. Leadership guidance this month points to the same pattern: one more hike, late in the year. The 2022 analogue required core inflation far above target and a committee in a hurry; today core CPI is near its lowest since 2021 and the vice chair has said there is no hurry.

Where the 2018 analogy breaks: every meeting now has a press conference, so October is technically as live as December, and a hot September CPI could still pull the move forward. That residual is why we stay above the low teens.

Start where version 1 ended, at 68%, which was also the pooled base rate. That number is far above where we land, and we defend the departure explicitly: the pooled rate is dominated by fast cycles, while the current cycle now matches the gradual 2015 to 2018 pattern, in which no hike was followed by another at the next meeting.

Adjustments. One comes from a version 1 signpost: down 15 points because the patience signpost fired when Williams said there is no need for urgency. The rest are new judgments, because version 1 only had an upside jobs signpost. Down 38 points for the jobs report: the Bureau of Labor Statistics reported September payrolls of 29,000, unemployment rising to 4.2% and July and August revised down by a combined 60,000, a miss large enough to remove the overheating case that version 1 rested on. Up 3 points, also new judgment, because September CPI, due October 14, could still come in hot enough to revive October. We do not add a separate adjustment for the market's repricing, to avoid counting the same evidence twice.

68 minus 15 minus 38 plus 3 lands at 18%, with a range of 10% to 30% that is wide on the upside because one inflation report remains before the meeting.