Stocks

October Fed Rate Hike Bets Plunge After Warsh Speech

Wall Street traders sharply reduced bets on an October interest rate hike after Federal Reserve Chair Kevin Warsh gave no indication that further tightening was imminent.

@fredyyudiawann Oct 16, 2026 · 14:12 UTC

Why it matters

Lower expectations of another rate hike could ease pressure on Treasury yields and support stock markets, particularly technology and AI shares. However, inflation remains elevated, and the Fed has not ruled out further rate increases. Sources: Reuters, CME FedWatch, ActionForex

According to CME FedWatch data cited Friday, the probability of an October rate hike fell to around 16%, down from nearly 28% on Thursday.

Speaking in Bangkok, Warsh expressed confidence in the U.S. economy but declined to signal the Fed's next move.

The shift came despite hotter-than-expected CPI and PPI inflation reports earlier this week.

The U.S. dollar also weakened as investors increasingly expected the Fed to keep rates unchanged at its October 27–28 meeting.