Traders Anticipate Federal Reserve Rate Hold After Weak Jobs Report

Traders on Kalshi have assigned an 85% probability that the Federal Reserve will refrain from raising interest rates at its upcoming meeting in October, following a disappointing jobs report for September. The U.S. Bureau of Labor Statistics reported that the economy added only 29,000 nonfarm payroll jobs, significantly below market expectations, which has led to speculation about the Fed's next move.

The unemployment rate for September was reported at 4.2%. This weak employment data has prompted traders to adjust their forecasts, with Kalshi's market reflecting a shift from a 65% probability of a hold after the release of inflation data on September 30, 2026, to the current 85% figure. Other prediction markets, including Polymarket and CME fed funds futures, have shown similar trends, indicating a broader consensus on the likelihood of a pause in rate hikes.

The Federal Open Market Committee is scheduled to meet on October 27 and 28, 2026, with the decision expected to be announced on October 28. Kalshi's contracts will settle based on the actual outcome of the FOMC's decision, providing a clear measure of how accurately traders have interpreted the economic signals leading up to the meeting. Despite the strong consensus for a hold, there remains a 24% to 28% chance of a potential rate hike, which could lead to market volatility if the Fed surprises traders.

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Source: KLEA News