Markets are now pricing another Fed hike as the base case.
CME FedWatch put the probability of a 25-basis-point increase at the Oct. 27-28 FOMC meeting at 68.1% on Sept. 28. The comparable post-September-meeting reading was 55.4% on Sept. 17, and the probability peaked at 70.9% on Sept. 23.
The clean series starts after the Fed's Sept. 16 hike, when the current target range reset to 375-400 basis points. From there, the 400-425 target range is a direct read on the market-implied odds of one more October hike.
The move matters because the October meeting has shifted from a toss-up toward a market-implied base case. Futures pricing is not a forecast from the Fed, but it shows traders increasingly expect policymakers to stay focused on inflation risk.
The latest jump also came against a tense macro backdrop. Reuters reported stronger rate-hike pricing alongside hawkish Fed commentary, while oil rose as Iran cast doubt on progress in talks over the Strait of Hormuz. Higher energy prices do not prove the hike is coming, but they make the inflation path harder for markets to ignore.