Will the Federal Reserve Cut rates by 25bps at their October 2027 meeting? — Cut 25bps

- [2026-09-16] The Federal Reserve raised its target range by 25bps to 3.75%–4.00% at the September 16, 2026 FOMC meeting, the first hike since 2023, approved by a 12-0 vote under new Chair Kevin Warsh. The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm - [2026-09-16] The September 2026 Summary of Economic Projections (dot plot) showed a hawkish shift: the median federal funds rate projection for 2026 rose to 4.1%, up from 3.8% in June. The 2027 median climbed to 4.1% from 3.6% , implying no cuts are projected through end-2027. - [2026-09-18] Market-implied expectations hardened further after the hike: futures are implying a fed funds rate of 4.635% near the end of 2027, which would argue for three or four more hikes ahead. https://www.cnbc.com/2026/09/18/three-words-from-kevin-warsh-have-wall-street-wondering-how-far-the-fed-will-go-with-rate-hikes.html - [2026-10-04] Fed Chair Kevin Warsh described the September hike as having "removed a dose of accommodation," and per CME FedWatch as of Oct. 1, 2026, the odds of the Federal Reserve hiking rates at its October meeting are about 33%. In the Fed's September 2026 economic projections, 16 of 18 Fed officials who submitted projections expected at least one more rate hike this year. https://www.fool.com/investing/2026/10/04/fed-chair-kevin-warsh-rate-hike-2023-accommodation/ - [2026-10-05] The most recent CME FedWatch-based tracking shows markets pricing a 77.9% probability that the Federal Reserve will maintain current interest rates through October, with a 22.1% chance of a cumulative 25 basis point hike , and for December, only an 11.4% probability of rates remaining unchanged, while a cumulative 25 basis point hike carries a 62.3% likelihood... A 50 basis point cumulative increase is priced at 24.3% . https://phemex.com/news/article/cme-fedwatch-779-probability-fed-holds-rates-in-october-98766 - [2026-10-02] Prediction-market pricing (Kalshi/Polymarket) for the October 28, 2026 meeting shows a hold is favored: hold is 84%, a cut about 2% ; no cut odds reported at any near-term meeting are close to prevailing. https://defirate.com/prediction-markets/fed-decision-odds/ - [2026-10-06] The next scheduled FOMC meeting is October 27–28, 2026 (non-SEP), followed by December 8–9, 2026 (SEP), then meetings through 2027, with the October 2027 meeting being the question's focus. Current target rate: 3.75% – 4% , as of the October 2026 meeting page. https://fedratecalc.com/fomc-meeting-schedule/october-2026/ - [2026-10-04] Inflation remains well above target, supporting the hiking bias: in his remarks at the September Fed meeting, Warsh estimated that the Fed's preferred measurement of inflation, the personal consumption expenditures (PCE) price index, rose about 3.6% in the year through August, far higher than the long-term target of 2%... it's reasonable to assume that Warsh interprets current monetary conditions as still fairly loose and that more work is needed to control inflation. https://www.fool.com/investing/2026/10/04/fed-chair-kevin-warsh-rate-hike-2023-accommodation/ - [2026-06-17] Forecasters at the time of Warsh's first meeting projected rate cuts would be delayed well into 2027: Capital Economics forecasts a rate hike in December 2027 and another early in 2027. Goldman Sachs forecasts that the central bank will probably not cut rates until mid- to late 2027. https://www.aljazeera.com/economy/2026/6/17/us-federal-reserve-holds-rates-steady-under-new-chair-warsh - [2026-10-01] Oil and energy costs are a key inflationary driver cited by analysts as a risk to further tightening, not easing: Brent crude hit $101.15/barrel amid the US-Israel-Iran conflict, with energy prices up 16.3% year-over-year through August, per BLS data cited in coverage of Warsh's remarks. https://www.fool.com/investing/2026/10/04/fed-chair-kevin-warsh-rate-hike-2023-accommodation/ - [2026-06-16] A CNBC Fed Survey of 32 economists/strategists found: the 32 respondents, including economists, fund managers and strategists, as a group see no rate change at this meeting or any meeting through 2027. https://www.cnbc.com/2026/06/16/kevin-warshs-fed-is-not-expected-to-make-any-change-to-rates-for-a-while-according-to-cnbc-fed-survey.html BOTTOM LINE: As of October 6, 2026, the Fed is in a tightening (not easing) cycle under new Chair Kevin Warsh, having just hiked in September 2026 with further hikes (not cuts) expected and priced through late 2026/2027; both the Fed's own SEP median and market-implied futures pricing point toward flat-to-higher rates through 2027, making a 25bps cut specifically at the October 2027 meeting inconsistent with the currently dominant trajectory and expectations. NOT FOUND: No direct SEP/dot-plot data specifically for the October 2027 meeting (SEP is not released at October meetings; next updates would come December 2026, March/June/September 2027), no CME FedWatch or prediction-market pricing for the specific October 2027 meeting itself (too far out to be quoted in current sources), and no confirmed Fed statement or guidance mentioning plans specifically for October 2027.

- [2026-09-16] The FOMC raised interest rates by a quarter percentage point, taking the target range of the federal funds rate to 3.75% to 4.00% , in a unanimous 12-0 vote — the first Fed hike since 2023, reversing the 2024-2025 cutting cycle. Source: https://www.chase.com/personal/investments/learning-and-insights/article/federal-reserve-raises-rates-officials-signal-one-more-hike-in-2026 - [2026-09-16] The September 2026 Summary of Economic Projections shows the median projection for the federal funds rate at the end of this year is 4.1%, where it remains in 2027 before falling to 3.9% by year-end 2028 , with these projections higher than June by 0.3 percentage points this year and 0.5 percentage points in both 2027 and 2028 . Source: https://fredblog.stlouisfed.org/2026/09/fomc-summary-of-economic-projections-september-2026 - [2026-09-17] A JPMorgan asset-management recap confirms the median dot explicitly implies no change in the policy rate through 2027: "The median participant now expects the fed funds rate to hike an additional 25bps ending 2026 at 4.1%, no change to the policy rate in 2027, and rate cuts in 2028 and 2029." Source: https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio-insights/fixed-income/fixed-income-perspectives/fomc-statement-september-2026/ - [2026-09-16] Of 18 dots plotted for 2027, the dispersion was notably hawkish: "four outliers projecting rate cuts in 2027 while the other 14 FOMC participants projected the target range to be either 4.00% to 4.25% or 4.25% to 4.50%." This means roughly 78% of committee members saw no cut at all in 2027. Source: https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot - [2026-10-01] Independent macro commentary (Yardeni) corroborates: "The median projection of meeting participants showed the FFR at 4.1% at the end of this year and next, i.e., one more 25bps hike in 2026 followed by a hold lasting throughout 2027... Fed Chair Kevin Warsh said the September hike 'removed a dose of accommodation,' implying that the FFR remains below the neutral rate." Source: https://yardeniquicktakes.com/economic-week-ahead-october-5-9 - [2026-09-16] New Fed Chair Kevin Warsh has signaled a hawkish, inflation-focused reaction function: "the decision to raise rates by 25bps at the September FOMC meeting was a process of removing accommodation... He also dismissed the SEP path on inflation, suggesting waiting until 2029 to hit 2% is being too slow, implying his version of 'timelier' calls for quicker and more hikes." Source: https://www.mufgresearch.com/rates/september-2026-fomc-recap/ - [2025-09-18] Historical base rate (pre-2026 regime): "Federal Reserve policymakers have lowered the target federal funds rate 55 times since 1990." Over roughly 290 scheduled meetings in that period (~8/year), that implies an unconditional base rate of roughly 15-20% of meetings featuring any cut, with 25bp being the modal cut size — but this base rate assumes "normal times" and does not account for the current hiking regime. Source: https://www.fool.com/investing/2025/09/17/fed-cut-interest-rates-stock-market-do-this-next - [2025-09-05] The October 27, 2027 FOMC decision date is confirmed on the Fed's own (tentative) 2027 calendar, alongside the rest of the eight-meeting schedule; "Each meeting date is tentative until confirmed at the meeting immediately preceding it." Source: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm - [2026-09-30] Historical analogues for abrupt Fed regime reversals (easing-to-hiking or vice versa) show that once the Fed commits to a new direction it rarely reverses again within just 12 months absent a shock — e.g., the 1994-95, 1998, and 2019 episodes each saw one direction persist through a full year before pivoting. No comparable source documents a hiking-to-cutting reversal occurring within 13 months historically without a recession or acute financial-stability shock. - [2026-10-01] No SEP is scheduled for the October 2027 meeting itself (SEP/dot-plot meetings are March, June, September, December), so the October 2027 decision will be a "blind" meeting relying on incoming data since the September 2027 SEP rather than a fresh dot-plot signal. Source: https://www.regardsofwallstreet.com/tools/fed-meeting-calendar BOTTOM LINE: The unconditional historical base rate for a 25bp cut at any given FOMC meeting is modest (roughly 15-20% of meetings since 1990 saw any cut), but the operative "outside view" has been overtaken by a clear regime shift: as of September 2026 the Fed is actively hiking under a hawkish new chair, with the median dot plot showing a flat 4.10% rate through all of 2027 and only a small minority of participants projecting any 2027 cut — implying the base-rate/consensus-forecast evidence currently points toward a hold (or possible further hike), not a cut, at the October 2027 meeting. NOT FOUND: No CME FedWatch-style market-implied probability specifically for the October 27, 2027 meeting was located (FedWatch-type pricing this far out is not typically published/liquid); no post-September-2026 SEP update (e.g., December 2026 dot plot) was available at time of research to confirm whether the 2027 "hold" median has since shifted.

YES means: the FOMC's October 27, 2027 decision lowers the federal funds target range by exactly 25bps (not a hold, not a hike, not a 50bp move). - [2026-10-02] The September 2026 jobs report showed a sharp labor-market deceleration — nonfarm payrolls rose by just 29,000 in September, well below the 84,000 forecast, and the unemployment rate rose to 4.2% — with a Jefferies economist calling it "the nail in the coffin for an October hike" , establishing a fresh dovish data point that could, if it persists through 2027, build the case for easing by October 2027. https://www.cnbc.com/2026/10/02/jobs-report-september-2026.html - [2026-10-02] Confirming the weak print, average hourly earnings rose an anemic 0.1% from August and are up 3% year over year, a level that's likely below the current rate of inflation , and job gains in July and August were revised lower by a total of 60,000 — a disinflationary wage signal that doves could cite for 2027 cuts. https://finance.yahoo.com/economy/article/septembers-jobs-report-shows-the-us-added-just-29000-jobs-and-unemployment-ticked-up-195320409.html - [2026-06-09] Goldman Sachs Research's baseline (most forward-looking private-sector 2027 forecast found) projects the Fed's next two cuts to come in June and December 2027 , with a terminal rate of 3-3.25%, which — while not pinpointing October — shows a major bank's house view that the cutting cycle resumes within 2027. https://www.goldmansachs.com/insights/articles/why-the-fed-is-unlikely-to-cut-rates-this-year - [2026-06-09] Goldman's own narrative for why cuts eventually resume rests on fading shocks: rate reductions should wait until tariff-related disruptions, oil price pressures stemming from the Iran conflict, and what the bank views as inflated AI demand have all subsided, and until year-over-year core PCE inflation closes in on 2% — a plausible path by autumn 2027 if these pressures fade on schedule. https://www.goldmansachs.com/insights/articles/why-the-fed-is-unlikely-to-cut-rates-this-year - [undated, ~2026-05] Bank of America's revised forecast (most recently updated of the major-bank calls) now pencils in the Fed will delay lowering interest rates until the second half of 2027 , specifically two quarter-point cuts in July and September 2027 — placing BofA's second 2027 cut just one meeting before the October 2027 date in question, making an October cut a plausible extension/continuation of that cutting sequence if inflation data cooperate. https://www.cbsnews.com/news/interest-rates-federal-reserve-inflation-bank-of-america/ - [2026-09-16] Morningstar's (most recent, post-September-hike) house forecast explicitly expects the Fed to pivot back to easing within 2027: based on our forecasts for inflation, GDP growth, and unemployment, we expect the Fed to return to cutting after this year... we expect progress on core inflation along with weakening growth to push the Fed to cut rates twice in the second half of 2027 , which would place one of those two cuts squarely in the September–December window bracketing the October 27, 2027 meeting. https://www.morningstar.com/economy/whats-ahead-2027-beyond-inflation-fed-rate-cuts-more - [2026-09-16] A separate, newer Morningstar commentary from Senior Economist Preston Caldwell reiterates: weakening economic demand, in conjunction with normalizing inflation, will call for a return to monetary policy loosening... we expect the Fed to cut twice in 2027 (undoing the two hikes in 2026) and a further four times in 2028 , directly undoing the September 2026 hike within 2027 — a scenario compatible with an October 2027 cut. https://www.morningstar.com/economy/warsh-pounds-table-inflation-fight-we-see-rate-cuts-2027 - [2026-10-05] Even amid the broadly hawkish regime, market-implied futures pricing (captured independently of the Kalshi contract itself) shows the path is not monotonically rising into 2027: forecasted fed-funds futures show the rate path flattening/plateauing between mid-2027 (4.65% in Jul '27) and October 2027 (4.76%), a far smaller marginal increase than earlier in the hiking cycle, consistent with the tightening cycle running out of room and turning by October 2027 if data cooperate. https://streetstats.finance/rates/fedfunds - [2026-06-16] Even the hawkish-skewed CNBC Fed Survey noted a potential accelerant for an earlier dovish turn: the announcement of a potential deal with Iran... could give Warsh flexibility to cut rates sooner than currently expected — i.e., resolution of the Middle East-driven energy/inflation shock (the primary hawkish driver cited throughout 2026) is an identified mechanism that could clear the path for 2027 cuts, including October. https://www.cnbc.com/2026/06/16/kevin-warshs-fed-is-not-expected-to-make-any-change-to-rates-for-a-while-according-to-cnbc-fed-survey.html - [2026-05 (cited within 2026-06 article)] Citizens Bank's analysis of Warsh notes his own ideological priors favor easing once conditions allow: AI is "profoundly" changing the speed of innovation and allowing the U.S. to expand at a faster pace than most advanced economies, enabling U.S. policymakers to lower rates without sparking inflation — a chair-level disposition that, combined with a weakening labor market (as seen in the September 2026 jobs report), could tip the Committee toward cuts by October 2027. https://www.citizensbank.com/private-banking/insights/new-fed-chair-kevin-warsh-impact-on-markets.aspx BOTTOM LINE: The strongest case for YES is a two-part mechanism — (1) the labor market has already begun visibly cracking (September 2026's 29k-job, 4.2%-unemployment print), and (2) multiple major-bank forecasts (Goldman: June/Dec 2027; BofA: July/Sept 2027; Morningstar: "twice in second half of 2027") converge on a resumed Fed cutting cycle landing in or immediately around the September–December 2027 window, making an October 2027 25bp cut a plausible (if not consensus-leading single-meeting) continuation of that already-forecast 2027 easing sequence, contingent on energy/inflation shocks fading and unemployment continuing to rise. NOT FOUND: No source gives a cut probability or dot-plot projection specifically pinned to the October 27, 2027 meeting (as opposed to "H2 2027" or specific months like June/July/September/December 2027); no post-September-2026-jobs-report updated bank forecast (e.g., a revised Goldman/BofA note reacting to the 29k print) was located confirming whether those 2027 cut-timing calls have since moved earlier.

YES means: the Federal Reserve cuts its target range by exactly 25bps at the October 27, 2027 FOMC meeting (resolving the Kalshi "Cut 25bps" outcome to Yes). - [2026-10-05] Futures-based market-implied pricing (Central Bank Watch, "expanding tree methodology validated at 97% alignment with the CME FedWatch Tool") shows the probability of the rate being lower than today's level at the October 27, 2027 meeting is essentially zero: "4.70%higher 99.4%same 0.7%lower 0.0%... October 27, 2027... 4.71%higher 99.4%same 0.6%lower 0.0%" — i.e., cumulative cut probability by that date is priced near 0.0–0.7%. https://centralbank.watch/federal-reserve/ - [2026-10-05] The same model's meeting-by-meeting table shows the "fresh move priced for" October 27, 2027 alone is a mere "1.0%+0.2 bp" -type increment (hike bias, not cut), with "lower" probability rounding to 0.0% at every meeting from January 2027 onward through October 2027. https://centralbank.watch/federal-reserve/ - [2026-10-02] Independent futures-model pricing (StreetStats) corroborates the no-cut trajectory, showing the implied fed funds rate rising from 3.88% today to roughly 4.76% by October 2027, i.e. "futures markets are pricing the rate to rise to about 4.1% by January and reach roughly 4.8% by October 2027... implied rates holding near 4.7% through 2031" , confirming a sustained higher-for-longer path through the question's exact date. https://streetstats.finance/rates/fedfunds - [2026-10-05] Kalshi's own sibling long-dated contract "Fed rate cut before 2027?" is priced at only about 5% Yes (implying ~95% No) for any cut at all before year-end 2026, and the "Next Fed rate hike?" contract puts "Before 2027" at roughly 74–84% likely — both pointing toward the hiking cycle persisting well past October 2027's date. https://kalshi.com/category/economics/fed - [2026-10-05] Kalshi's "Number of Fed rate changes before 2027" contract has "Exactly 2" (i.e., two more hikes, zero cuts) as the modal outcome at roughly 60–63% probability, consistent with no cut priced anywhere in the near-to-medium term. https://kalshi.com/category/economics/fed - [2026-09-16 FOMC dot plot detail] Beyond the median holding flat, the actual dot dispersion for 2027 shows a strong majority against any cut: of 18 FOMC dots, "The dot plot for 2027 showed all but four voters expecting higher rates than now by the end of next year. More expected two hikes than expected one. Three expected one cut and one expected several cuts by year-end 2027." Only 1-in-18 projects multiple cuts, and just 4-in-18 project any cut at all for the full year 2027. https://www.schwab.com/learn/story/fomc-meeting - [2026-08-28/31] Chair Warsh's post-hike rhetoric has only hardened since the hike was delivered: at Jackson Hole he stated "the US central bank will 'have work to do' if policymakers are not confident that underlying inflation is returning to its 2 percent target" , and Deutsche Bank's base case even then was for 50bps of further hikes in 2026 (September and December), not cuts. https://www.aljazeera.com/economy/2026/8/28/us-fed-chair-warns-inflation-progress-insufficient-hints-at-rate-hikes - [2026-10-04] CBS News analysis of the September decision underscores the asymmetry in risk: "Warsh delivered a decidedly hawkish message that opened the door to additional rate hikes... Policymakers projected one additional hike in 2026 and none in 2027, but Warsh signaled a willingness to further raise rates if that's what is required to finally bring inflation under control." This is a chair actively guiding toward more tightening risk, not toward cuts, a full year before the contract date. https://www.cbsnews.com/news/fed-rate-hike-warsh-trump-inflation/ - [2026-10-02] CME FedWatch-replica tool (Investing.com) shows near-term rate-path odds still skewed toward hold/hike with essentially no cut probability priced for the 3.75-4.00% range persisting versus a move to 4.00-4.25%, reinforcing that the entire curve embeds further tightening, not easing, well into 2027. https://www.investing.com/central-banks/fed-rate-monitor - [Mechanism] Under the question's own tie-break rule, if the October 2027 meeting is canceled, "Fed maintains rate" (not the cut outcome) resolves Yes — a low-probability but strictly NO-favoring technicality for the cut contract, since Fed calendars show no history of an FOMC meeting being outright canceled. - [Mechanism] Because outcomes are mutually exclusive, a cut specifically sized at 25bps (versus 50bps, a hold, or any hike) must occur for Yes; even in the tail scenario where the Fed eventually begins easing sometime in 2027, the specific coincidence of the first or ongoing cut landing exactly on the October 27 date and at exactly 25bps (not 50bps, which carries its own non-trivial pricing per the "greater than 25bps" sibling market) further narrows the path to Yes. BOTTOM LINE: Every available market-based read (futures-implied probability trees, Kalshi sibling contracts, and CME-style monitors) and every post-hike Fed communication from Chair Warsh show the Fed currently positioned in an active hiking cycle with cut probability priced near 0% all the way out to and including October 27, 2027; absent an unforeseen shock, both the structural mechanism (mutually exclusive mutually-exclusive outcomes, no-cancellation precedent) and the weight of current data argue strongly for NO. NOT FOUND: No CME FedWatch-branded (official) probability specific to October 27, 2027 was locatable (the instrument is too far-dated for CME's own public tool, though a 97%-correlated proxy was found at centralbank.watch); no post-October-2026 FOMC/SEP update exists yet to confirm whether this hold/hike median persists through 2027.