Every week this autumn, a headline has told bitcoin investors that the odds of a Federal Reserve rate hike have jumped or collapsed. On 6 October the desk reported hike odds for the 28 October meeting falling from 71% to 19% after a weak payrolls report (that piece is here); Admiral Markets, quoting CME FedWatch, put the figure at 21.59% on 2 October and 26% on 7 October (Admiral Markets, October 2026). Three different numbers for the same meeting in the same week. Before using any of them, it helps to know what they are. A hike “probability” is not a poll of economists and it is not a Fed forecast. It is a number backed out of futures prices, and reading it well takes six checks. This is Field Guide #54, and it scores each check on the odds for the 28 October meeting.
What the number is: a price translated into a probability
The CME Group’s FedWatch tool is built on 30-day Fed funds futures. Each contract settles on the average daily effective federal funds rate (EFFR) for one calendar month, and its price is quoted as 100 minus that rate. In CME’s own methodology note the identity is written EFFR(Avg) = 100 − Contract Price, with the example that a price of 96.94 implies an average rate of 3.06% (CME Group, FedWatch methodology). Traders who expect the Fed to raise rates bid the price down, because a higher expected rate means a lower price. FedWatch compares the implied average rate with the current target range and effective rate, then converts the gap into odds of a move in 25-basis-point steps. In the simplified form for a hike, probability = (expected new rate − current rate) / 0.25 percentage points.
Two things follow immediately. The figure is a market price, so it changes every second that the contract trades and can be moved by a single speech: investingLive documented how the implied odds of a September hike fell from about 67% to 54.6% within minutes of a speech by Fed Governor Christopher Waller on 3 September 2026 (investingLive). And it is an expected value squeezed into a probability, which brings in the first check.
Check 1: Which meeting, and which contract?
The next FOMC meeting is on 27–28 October, with the decision announced on Wednesday 28 October at 2:00 p.m. ET. Any new target takes effect the following day, 29 October. That matters because October has 31 days and only 3 of them (29, 30 and 31 October) fall after the decision. A hike of 25 basis points with certainty would lift the October contract’s implied monthly average by only 25 × 3/31 ≈ 2.4 basis points. A 26% hike probability would shift it by only about 0.6 basis points. Professionals therefore read the odds for the 28 October meeting mainly off the November contract, where every day of the month is post-decision and a 26% probability moves the implied rate by about 6.5 basis points. CME’s method handles this by backing out the start-of-month rate with day-count weights; the point for a reader is that the quoted number depends on arithmetic you cannot see unless you ask which contract it came from.
Check 2: What is the baseline rate?
The Fed raised its target range by 25 basis points to 3.75%–4.00% on 16 September in a 12–0 vote, according to the Admiral note. The futures arithmetic runs off the effective rate, which trades inside the range, not off either edge. Here is a worked example with an illustrative effective rate of 3.88% (this desk has not verified the current effective rate; the figure is chosen only to show the mechanics). The November contract would then price at 100 − 3.88 = 96.12 if no hike were expected, and at 100 − 4.13 = 95.87 if a hike were certain. At 26% odds the price would be 96.12 − 0.065 = 96.055; at 19% it would be 96.0725; at 70%, 95.945. The 52-point swing between 71% and 19% is worth about 13 hundredths of a point on a contract priced near 96. Small price moves, big headline swings.
| Hike probability | Implied November average rate (illustrative 3.88% base) | November contract price | Change vs. no-hike price |
|---|---|---|---|
| 0% | 3.880% | 96.1200 | 0.0000 |
| 19% | 3.9275% | 96.0725 | −0.0475 |
| 26% | 3.945% | 96.0550 | −0.0650 |
| 70% | 4.055% | 95.9450 | −0.1750 |
| 100% | 4.130% | 95.8700 | −0.2500 |
Illustration only. The base rate is hypothetical; the contract-price arithmetic follows the 100-minus-rate identity described by the CME Group. It ignores bid-offer spreads and any expectation of a move at later meetings.
Check 3: Remember it is an expected value, not a poll
FedWatch assumes the Fed moves in 25-basis-point multiples, and it converts any leftover into probabilities of the next size up. In CME’s worked example an expected change of 0.725 percentage points becomes 2.9 hikes of 25 basis points, interpreted as a 10% chance of 50 basis points and a 90% chance of 75. The mapping is tidy, but the market could be thinking something different: a 26% “hike” reading could equally reflect a 13% chance of a 50-basis-point hike (13% × 2 = 26%) and an 87% chance of no change. The expected rate is the same; the story is not. The tool’s own caveat is that results are estimates and may vary if its assumptions do not hold.
Check 4: Timestamp and source
The three numbers in the opening paragraph are not contradictory so much as differently timed and sourced. Odds were about 70% in late September, 21.59% on 2 October and 26% on 7 October, per Admiral’s summary of CME FedWatch; this desk’s own 6 October piece used 19%. Between 2 and 7 October there were, among other things, a payrolls report (September payrolls rose 29,000 against a forecast of roughly 90,000) and the release of the September FOMC minutes. A probability with no clock next to it is an incomplete number. When you cite one, write the date, the hour and the source; when you read one, assume the price has already moved.
Check 5: Read the path, not the level
The level of the odds is a snapshot; the path is the information. The September meeting is the cleanest case study this year. In the first days of September the implied probability of a September hike was roughly 60–67%; after Waller’s speech on 3 September it fell to about 54.6% and then drifted toward 50%. Then the August CPI report on 11 September showed core inflation at +0.3% against a +0.2% consensus, and this desk recorded the odds moving from about 70% to close to 90% by that Friday evening. On 16 September the Federal Open Market Committee raised rates, 12–0. So the market was right that a hike was more likely than not, and it was uncertain for most of the preceding two weeks. A 50% reading a fortnight before a decision is not a wrong answer; it is what genuine uncertainty looks like in a price. The same logic applies now: a swing from 71% to 19% to 26% in a single week tells you the market is highly sensitive to data, which is the information to carry into Wednesday.
Check 6: Cross-check against the rest of the curve
Admiral notes that a December hike was “largely priced” even as the October odds sat near a quarter, and the September FOMC minutes (covered here) said most participants saw another increase as likely appropriate by year-end. Put together, the market is not arguing about whether there is another hike, but when. A low October number alongside a high December number says “wait for more data”, not “the Fed is done”. Compare the meeting odds with the 2-year Treasury yield, which prices the whole path of policy rates, before drawing conclusions from any one meeting.
Scoring the October odds
| Check | Question | October 28 meeting: result |
|---|---|---|
| 1 | Which contract? | Decision 28 Oct, effective 29 Oct: only 3 of 31 October days are post-decision, so read the November contract. Pass if the source says so. |
| 2 | Baseline? | Target range 3.75%–4.00% after the 16 Sep hike; the effective rate was not verified here. Open. |
| 3 | Expected value or poll? | A 26% reading can hide a 50bp tail. Not separable from the headline number. Open. |
| 4 | Timestamp/source? | 19%, 21.59% and 26% in one week across sources. Fail unless dated. |
| 5 | Path? | ~70% late Sept to ~20% 2 Oct to 26% 7 Oct: high data sensitivity. Informative. |
| 6 | Curve cross-check? | December hike largely priced, per Admiral. Pass: question is timing. |
What this means on Wednesday 14 October
September CPI is due at 8:30 a.m. ET on Wednesday; the consensus headline is +0.6% month on month and 3.6% year on year, with core at +0.2% (investingLive, week ahead). Readers who want to anticipate the effect on the odds should not guess a number; they should watch the November contract and the 2-year yield in the minutes after 8:30 a.m. ET. For bitcoin, the desk’s companion analysis today looks at how it traded on the last seven CPI releases: it moved more than on an ordinary day, in a direction the print did not reliably predict. The Fed odds and the bitcoin price react to the same data, but not always the same way.
Sources: CME Group (FedWatch methodology, 2023); investingLive (2026 FedWatch explainer; week-ahead calendar); Admiral Markets (CPI preview, October 2026). Hypothetical figures are labelled as such. Prices and odds are as of 10 October 2026 unless stated.
Method: bitcoin and ether prices, highs, lows and closes are Coinbase Exchange candles (UTC day or UTC hour) pulled by Bitcoin Mastery at about 06:15 UTC on Saturday 10 October 2026; the 10 October candle is still open at that time, so any closing figure quoted is the 9 October close unless stated. Third-party figures are attributed to their source and date.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Bitcoin and other cryptocurrencies are volatile and you can lose some or all of the money you put in. Nothing here is a recommendation to buy, sell or hold bitcoin, any exchange-traded fund, any listed security or any other asset, and the technical levels, probabilities and scenarios discussed are descriptions of published data, not forecasts. Do your own research and consult a licensed financial advisor before making investment decisions.