Kalshi traders now assign a 65% probability to the Federal Reserve maintaining its current interest-rate setting in October, versus 33% for a 25-basis-point increase. On Sept. 25, the market had priced the hike outcome at 65%. The reversal followed inflation data showing core PCE (a measure excluding food and energy) rising 3.0% year over year, below economists’ 3.3% forecast, while headline PCE increased 0.3% for the month and 3.4% over 12 months. CME’s FedWatch tool also showed reduced expectations for an October increase. New York Fed President John Williams said on Sept. 29, 2026, that there was no need for urgency after the Fed’s September action, although TradeStation’s David Russell cautioned that the data did not capture a recent surge in diesel prices. Oil and fuel-cost risks linked to the war in Iran and disruption in the Strait of Hormuz continue to support concerns about inflation and higher Treasury yields. Expectations for another rate increase have shifted further toward December.