Fed hold for October holds firm above four in five

A hold is priced at 84%, with the hike alternative at 17% and no cut on the board.

In one line: The Fed leaves rates unchanged when it decides on 29 Oct, an outcome the 84% hold price, matched at 83% on Kalshi, still underrates.

Traders give 84% to the Federal Reserve leaving rates unchanged at its October meeting, up from 34% on 28 Sep. The Polymarket contract climbed 49 points over the seven days to 83% on 5 Oct. It touched a high of 87% on 2 Oct and has held near 83% for at least two days. A 1-point rise in the last 24 hours took it to 84%.

The rest of the event leaves one alternative. A rise of 25 basis points (bps), a quarter of a percentage point, trades at 17%. Both cuts and a rise of 50bps or more sit at 0%. Kalshi prices the same meeting at 83% for a hold and 18% for a 25bps rise, so two separate books agree within a point.

The case for a rise collapsed in the week to 2 Oct, and the hold price has given back only 4 points of that week's gain since. That retreat from the 87% high is more plausibly traders keeping a hedge on a rise than fresh doubt about a hold. Further out, a rise of 50bps or more at the December meeting trades at 3%, so traders see no rush to tighten beyond October either. On this reading the 17% hike price looks generous: both venues put a hold at 83% to 84%, and no other outcome trades above 1%.

The Fed keeps the upper bound of its target range where it is when the Federal Open Market Committee decides this month, an outcome the 84% price still underrates. The call is wrong if the committee announces a 25bps rise at the meeting the contract resolves on 29 Oct, 24 days from now. The best case for the other side is the hike price itself: 17% on Polymarket and 18% on Kalshi show traders on both venues still see a real chance. A hold leaves the Fed's benchmark rate, the floor under American borrowing costs, unchanged until at least December.