Latest update, 1:30 PM PT, Thu Oct 29, 2026: Polymarket's December 25 bp hike contract sits at 75.5% (as of 1:10 PM PT), down 5 points in a day and back where it was before Wednesday's Fed decision. Kalshi shows 75 cents. No Fed officials have spoken publicly since Warsh's press conference. We will update this page as data and Fed speakers come in.
BOOK FACT · NOT A TICKET
Wednesday afternoon, the crowd was sure. Two Fed officials had just voted to hike, Kevin Warsh had refused to call policy tight, and the odds of a December rate hike jumped above 80%. Then Thursday morning brought a hotter inflation print, and the odds went down, not up.
That is the puzzle of this story. September PCE inflation rose to 3.6% from 3.4%, and Q3 GDP grew at a 3.4% pace. Neither is a reason for the Fed to stand down. Yet the prediction markets gave back the whole post-decision jump. On Polymarket, a December hike traded at 80.5% at 12:54 PM PT Wednesday. By 1:10 PM PT Thursday it was 75.5%, the same level as our Oct 27 vote-count preview. The CME FedWatch tool, which reads fed funds futures, slid too, from about 85% before the statement to 79.6% by late Thursday morning (IBTimes).
Will the Fed raise rates in December 2026?
The markets still say yes, roughly three in four. The Fed held at 3.75% to 4% on Oct 28 in a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack both preferring a 25 bp hike right away. The statement upgraded growth to "expanding at a strong pace" and said "inflation remains elevated." Nationwide's Kathy Bostjancic said Logan and Kashkari likely voted with the majority because they expect a December hike (Bloomberg via Economic Times), and TD's Oscar Muñoz said "the bar is very high for them to not hike again."
What the market does not have is a promise. Warsh said: "If we had a firm conclusion... we'd announce it." He called the stretch to December an "information-rich interval." That leaves the next jobs and CPI reports in charge.
How the December odds moved this week
| As of (PT) | Polymarket 25 bp hike | Polymarket no change |
|---|---|---|
| Thu Oct 22, 4:00 PM | 71.5% | 24.0% |
| Tue Oct 27, 10:31 AM | 75.5% | 21.5% |
| Wed Oct 28, 10:00 AM (pre-statement) | 76.5% | 19.5% |
| Wed Oct 28, 12:54 PM (post-presser) | 80.5% | 16.5% |
| Thu Oct 29, 6:00 AM (post-PCE/GDP) | 77.5% | 19.5% |
| Thu Oct 29, 1:10 PM (live) | 75.5% | 21.5% |
Polymarket "Fed decision in December" market, public API and price history. Market prices are not forecasts.
CME FedWatch, per secondary reports: about 88% before the Oct 28 decision (investingLive), 84.2% after it (IBTimes), 83.0% before PCE and 81.3% just after it (TMTPost citing CME), then 79.6% later Thursday morning (IBTimes). The figures come from different snapshot times, so treat them as a direction, not a precise series. We could not load the live CME page directly at publish.
Why did hike odds fall after a hot PCE?
Because hot was expected. September PCE rose 0.5% on the month and 3.6% from a year ago; core rose 0.3% and 3.1%, from 3.0%. Both were in line with consensus, and energy did most of the lifting (IBTimes, Yahoo Finance). An in-line number removes a hawkish surprise the market had partly priced.
GDP was strong, at 3.4% annualized versus 2.2% in Q2 and about 3.2% expected, with final sales to private domestic purchasers up 4.9% (BEA, USA Today). But the quarter's own inflation gauges were soft: the Q3 PCE price index rose 2.1% annualized and core 2.5%. That mix, fast growth with cooler quarterly prices, gives the Fed room to wait.
The press conference also did not land as hawkish as the dissents. The 2-year Treasury yield fell 4 bp to about 4.7% after Warsh spoke (Bloomberg), even as he said: "If you think that we're tolerating some inflation target somewhere in the twos, let us disabuse you of it." We covered the decision in our Oct 28 recap and the setup in our Fed decision preview.
What about January?
Polymarket's January 2027 market leans to a pause after any December move: no change at 69% and a 25 bp hike at 28% as of 1:10 PM PT, versus 66.5% and 31.5% at our Wednesday recap. On CME, TMTPost reported a 58.3% chance of a cumulative 25 bp of hikes by January and 29.9% for 50 bp.
Fed speakers and data to watch before December
- Fed speakers: none have spoken publicly since Warsh's presser as of 1:10 PM PT. Watch for Hammack and Cook explaining their dissents, plus Logan and Kashkari.
- October jobs report: the first big test of the "strong pace" language.
- October CPI: the last major inflation read before the December meeting.
- Odds check: a move back above 80% on Polymarket or FedWatch would say the market believes the dissents; a slide toward 60% would say it believes "no firm conclusion."
For the bigger picture on how this hiking cycle got here, see our earlier explainer, The Fed hiked. The odds say October and December aren't done.
FAQ
Will the Fed raise rates in December 2026?
Markets lean yes. As of 1:10 PM PT on Oct 29, Polymarket priced a 25 bp December hike at 75.5% and Kalshi at 75 cents. CME FedWatch was near 79.6% late Thursday morning. These are market prices, not forecasts.
What are the December Fed hike odds after PCE?
They slipped. Polymarket fell from 80.5% Wednesday afternoon to 75.5% Thursday afternoon, and FedWatch moved from 81.3% just after the PCE release to 79.6% later in the morning.
Why did the odds drop if inflation rose?
September PCE, at 3.6% headline and 3.1% core, matched expectations, so it added no hawkish surprise. The Q3 PCE price index was soft, and Warsh said the Fed had no firm conclusion about December.
When is the December 2026 Fed meeting?
Polymarket's December decision market is set to close on Dec 9 PT, at the end of the December FOMC meeting.
What rate did the Fed set in October 2026?
The Fed held the target range at 3.75% to 4% on Oct 28 in a 10-2 vote. Lisa Cook and Beth Hammack dissented in favor of a 25 bp hike.
Bottom line
The December hike is still the base case, at roughly 76% on Polymarket and close to 80% on FedWatch, but the post-decision jump is gone. An in-line PCE print and a Fed chair who would not commit pulled the odds back to where they started the week. Jobs, CPI and the first Fed speakers decide the rest.
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BOOK FACT · NOT A TICKET. This is news reporting, not investment advice. Prediction market and futures prices are not forecasts.
Sources: Polymarket gamma API and price history, pulled 1:10 PM PT Oct 29; Kalshi public API (KXFEDDECISION-26DEC), 1:10 PM PT; Federal Reserve FOMC statement and press conference transcript, Oct 28; BEA GDP advance estimate Q3 2026; IBTimes, Oct 29; TMTPost citing CME FedWatch, Oct 29; investingLive, Oct 29; Axios, Oct 28; CNBC, Oct 29; Yahoo Finance, Oct 29; USA Today, Oct 29; Bloomberg via Economic Times. The CME FedWatch page could not be loaded directly at publish.