Post-CPI futures reprice the Fed: Oct. 28 hike odds near 44%, roughly double the pre-print level

September’s stronger-than-expected core consumer price index prompted traders to raise expectations for a Federal Reserve rate increase. Following the release, fed funds futures priced the probability of a quarter-point hike at the Oct. 28 meeting at about 44%, roughly twice the pre-release level, according to Investor’s Business Daily.

October remains uncertain

The repricing left an October increase below a 50% probability, even as the inflation report strengthened expectations for tighter policy. September core prices rose more than expected, according to Investor’s Business Daily.

The futures outlook was considerably firmer further out: the probability of a hike by the Dec. 9 meeting reached 96.5%. That distinction matters—the December figure concerns an increase by that meeting, rather than necessarily an increase at that meeting.

Stocks and yields react

The S&P 500 moved lower after the CPI release, while Treasury yields rose, according to Investor’s Business Daily. The 2-year Treasury yield, which closely tracks expectations for Fed policy, climbed 12.7 basis points.

Together, those moves reflected a shift in the expected policy path after the inflation surprise. The October probability still indicated substantial uncertainty about the timing of a hike, despite the much higher probability assigned to an increase by December.

What it means for prediction markets

• Timing is the key distinction: About 44% odds for a quarter-point hike on Oct. 28 and 96.5% odds of a hike by Dec. 9 refer to different outcomes.
• Futures provide a comparison point: These are probabilities derived from fed funds futures, not reported prediction-market contract prices.
• Resolution wording matters: A contract on a hike at a particular meeting should not be treated as equivalent to one covering any hike by a deadline.