Fed After Weak Nonfarm: October Rate Hike Odds Drop Sharply, but December Remains Open
Author: Crypffalo Research · 20:35 04/10/2026
After the US added only 29,000 jobs in September, markets have all but priced out a Fed hike on Oct 28. Most forecasts, however, still see the Fed possibly hiking again in December.
Just over two weeks after the Fed unexpectedly raised rates for the first time since 2023, a weak September jobs report has shifted the market: the odds of another hike at the Oct 27–28 meeting have dropped sharply. Here is what crypto investors need to know.
Where is the Fed?
- On Sep 16, 2026, the Fed raised rates by 0.25 percentage points to 3.75–4.00%, in a 12-0 vote. It was the first hike since 2023.
- Fed Chair Kevin Warsh stressed: "Inflation is too high, and has been for too long."
- Dot plot: 16 of 19 members expect at least one more hike before the end of 2026. The median projected rate for end-2026 is 4.1%.
September jobs report much weaker than expected
- The US added only 29,000 jobs, versus a forecast of about 84,000.
- The unemployment rate rose to 4.2%.
- Hourly wages rose only 0.1% on the month and 3.0% year over year, the slowest annual gain since May 2021.
- The previous two months were revised down by a combined 60,000 jobs: July from +21,000 to −10,000, August from +162,000 to +133,000.
- Inflation also eased: core PCE for August rose 3.0% year over year, below the 3.3% forecast.
How did markets react?
- According to CME FedWatch, the odds of the Fed holding rates on Oct 28 rose to about 77%. Several other sources put the probability of an October hike at only about 17–22%.
- The odds of a December hike remain high, at about 65–75% on prediction markets.
- The US 10-year Treasury yield fell about 0.06 percentage points to 5.18%, and the 2-year yield to 4.73%. The US Dollar Index (DXY) fell from 102.1 to 101.7.
- Thomas Simons, chief economist at Jefferies: the figure "virtually ends the chance of an October rate hike". Michael Feroli (JPMorgan) still thinks the Fed is likely to hike in December. Minneapolis Fed President Neel Kashkari maintains his hawkish stance on inflation.
What it means for crypto
- High interest rates and bond yields above 5% usually weigh on risk assets such as crypto. A Fed pause in October helps ease short-term pressure.
- However, if CPI on Oct 14 (7:30 PM GMT+7) comes in above forecast, the odds of a hike could return quickly and markets would become highly volatile.
- The Fed decision will be announced at 1:00 AM GMT+7 on Oct 29. See the exact time and countdown in the Economic Calendar, and learn more in the Crypto Glossary.
For information only, not financial advice.
Tags: Fed, Interest Rates, Nonfarm, US Macro
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