Prediction markets make major U-turn on Fed’s October rate decision

As Fed Chair Kevin Warsh refused to preview the October 28 rate decision on October 16, 2026, during an IMF (International Monetary Fund) fireside chat in Bangkok, saying he does not prejudge meetings, prediction markets sharply raised their odds of no change.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

On Friday, at the time of reporting, the probability of a no rate change in the Fed’s October decision surged to an all-time high (ATH) of 87%, according to data Finbold analyzed from Polymarket, a top-tier decentralized prediction market platform. 

Prediction for October’s Fed decision. Source: Polymarket

The odds of a 25 basis points (bps) rate hike in October were at 14%. The Federal Reserve raised its interest rates by 25 basis points to a target range of 3.75% to 4.00%, during its September 16 policy decision.

At press time, the no-change outcome had a reported volume of $13.15 million compared to $9.97 million for the 25bps increase.

Performance of the contract for the Fed’s decision rate in October on Friday. Source: Polymarket 

Warsh was asked about the direction of U.S. monetary policy and the prospects for another interest-rate increase at the Federal Reserve’s upcoming October 28 meeting.

Warsh responded with a non-committal stance, which markets interpreted as leaving the door open to a pause, thereby prompting a sharp rise in the probability of no rate hike in October.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

What’s next for Fed’s rate decision in 2026

At the time of writing, the odds of zero Fed rate cuts by the end of 2026 had climbed to 96.8%, signaling high conviction largely due to the recent sticky inflation. 

Prediction for the number of Fed rate cuts in 2026. Source: Polymarket

What’s in it for cryptocurrencies?

Most of the cryptocurrencies remained trapped in a correction phase over the past seven days through October 16, driven by hotter-than-expected inflation data from the United States.

Crypto performance on Friday. Source: CoinMarketCap

As a result, a possible no-rate change in the upcoming Federal Open Market Committee (FOMC) meeting, could rejuvenate bullish sentiment.

Featured image via Shutterstock

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.