Key Highlights

● The Fed held rates at its October 27-28 meeting.

● The vote was 10-2, with Lisa Cook and Beth Hammack dissenting.

● By October 30, 2026, futures showed a December hike as likely.

● Odds had eased somewhat from Wednesday morning.

The Federal Open Market Committee left its benchmark rate range unchanged at the end of its October 27-28 meeting, its first decision since raising rates in September. The vote was 10-2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a quarter-point hike.

By Friday, October 30, 2026, futures markets had made up their minds. CME FedWatch data showed a December hike as the likely outcome, according to market data, though the odds had eased somewhat from Wednesday morning, according to market data. Prediction markets Polymarket and Kalshi also leaned toward a hike, and markets are pricing in more than half a point of increases by mid-2027, according to LSEG data cited by market data.

What Warsh said

Chair Kevin Warsh gave little away about December. "I don't believe in forward guidance absent exigent circumstances, absent a crisis," he said at his press conference. "I also don't believe in prejudging meetings. A lot of things can happen."

He did leave no doubt about the Fed's concern. "But Inflation remains elevated," Warsh said, adding: "The Committee will deliver price stability." The policy statement upgraded the Fed's description of growth from "solid" to "strong." "Chair Warsh was reluctant to provide strong signals at the FOMC meeting yesterday," James McCann of Edward Jones said.

The data that tipped the scales

Thursday's reports added to the case. Third-quarter gross domestic product grew at its fastest pace in a year and beat forecasts, and the September personal consumption expenditures price index showed both headline and Core Inflation at their highest levels since May. Initial jobless claims fell to 194,000, below the 202,000 expected. "Today's data strengthens the case for another rate increase in December," a Wealth advisor said.

Friday's data were mixed. The third-quarter employment cost index rose in line with forecasts, while the Chicago purchasing managers index fell to 55.3, below expectations of about 56 but still in expansion territory.

A hawkish chorus

Three Fed officials argued on Friday that rates need to go higher, according to market data. St. Louis Fed President Alberto Musalem said in New York, "I judge that additional firming of Monetary Policy will be necessary, and soon." Dallas Fed President Lorie Logan said she wants at least two more quarter-point hikes. Richmond Fed President Tom Barkin said on SiriusXM, "I think the question though is pace."

The hike bets rippled across markets. Gold fell $132.50 to $3,898.90, a 52-week low, as traders repriced the Fed outlook. Treasury yields slipped on Friday as stocks sold off, with the S&P 500 falling 140.32 points to 7,580.07, though the 10-year yield remained below where it stood before Wednesday's decision. The dollar index edged down to 101.92, and high-yield Credit spreads widened, according to ICE BofA data cited by market data.

What to watch

The October jobs report on Friday, November 6, is the next major test. ISM Manufacturing and services surveys arrive earlier that week, and the midterm elections fall on Tuesday, November 3. Warsh said "politics played no role in the decision." a portfolio manager described "the lack of Job growth" as the "missing piece," according to market data, making the Payroll numbers a key input before the December meeting.