Futures Lift Odds of a December Fed Rate Rise to 76.8% After October Payrolls
Futures traders put the odds of a quarter-point Fed rate rise in December at 76.8% after the October jobs report, up from 66.9% a day earlier, CME FedWatch showed.
For American households and companies paying floating rates, a second increase within three months is now the market’s clear base case. The shift reached into next year as well. The most likely single outcome in futures pricing for the end of 2027 matches the rate level projected by eight Fed policymakers in September, although the market distribution and the Fed’s projections measure different things.
December odds jump 9.9 points in a day
The probabilities are derived from prices of 30-day federal funds futures and stood at these levels at 15:20 GMT, less than two hours after the Bureau of Labor Statistics released the report. The chance of no change in December fell by the same 9.9 points, to 23.2%.
Futures put no weight on a half-point move at the meeting of 8 and 9 December. A quarter-point rise would lift the target range to 4.00% to 4.25%.
The report is set out in The Edge’s coverage of 6 November. Payrolls rose by 165,000 in October, and the unemployment rate changed little at 4.1%.
Revisions added 84,000 jobs to August and September combined. Average hourly earnings rose 0.4% on the month to $38.00.
The jump reversed a drift lower over the previous week. The probability of a December rise stood at 70.7% on 30 October and slipped to 66.9% by 5 November, before climbing above both readings on 6 November.
The odds remain below early October’s. On 6 October, futures put the chance of some increase in December at 84.5%, including a 16.1% chance of a half-point move.
December 2026 meeting: outcome probabilities (in %)
| Outcome | 6 Nov | 5 Nov | 6 Oct |
|---|---|---|---|
| No change | 23.2 | 33.1 | 15.5 |
| Quarter-point rise | 76.8 | 66.9 | 68.4 |
| Half-point rise | 0.0 | 0.0 | 16.1 |
CME FedWatch probabilities for the meeting of 8 and 9 December, implied by 30-day federal funds futures; the 6 November column is as of 15:20 GMT. No change means the current 3.75% to 4.00% range.
On 28 October the Committee kept the range at 3.75% to 4.00%, where a quarter-point rise on 16 September had set it, as set out in our report that day. Two members, Lisa D. Cook and Beth M. Hammack, preferred a quarter-point increase.
The statement described economic activity as expanding at a strong pace, where September’s had said solid. As in September, it said inflation remains elevated.
Pricing for 2027 swings back toward two more increases
The repricing reached well beyond December. For the March 2027 meeting, the chance that the range sits at least two quarter-points above today’s rose to 42.8% from 34.7% on 5 November.
The chance of at least one increase by March reached 89.1%, from 83.1% the day before. An unchanged range now carries 10.9%.
By the meeting of 7 and 8 December 2027, the single most likely outcome is a range two steps above today’s, at 36.4%. The chance of two or more increases by then rose to 62.2% from 54.0% on 5 November.
The chance of a range no higher than today’s by the end of 2027 fell to 8.2% from 12.4%. The probability of a range below today’s is 0.5% or less at every meeting through December 2027.
The tilt is still smaller than a week earlier. On 30 October, futures put the chance of two or more increases by December 2027 at 71.3%.
Read as a rate, the December 2027 contract implies an average federal funds rate of 4.350% for that month, on The Edge’s calculation. Each implied rate is 100 minus the futures contract price. The November 2026 contract implies 3.879%, a gap just short of two quarter-point steps.
December 2027 meeting: probability by target range (in %)
| Target range | 6 Nov | 5 Nov | 30 Oct |
|---|---|---|---|
| 3.50 to 3.75 | 0.5 | 0.8 | 0.5 |
| 3.75 to 4.00 | 7.7 | 11.6 | 6.0 |
| 4.00 to 4.25 | 29.6 | 33.7 | 22.2 |
| 4.25 to 4.50 | 36.4 | 34.3 | 34.1 |
| 4.50 to 4.75 | 19.8 | 15.7 | 25.3 |
| 4.75 to 5.00 | 5.3 | 3.6 | 9.8 |
| 5.00 to 5.25 | 0.7 | 0.4 | 1.9 |
| 5.25 to 5.50 | 0.0 | 0.0 | 0.2 |
Futures-implied probabilities for the meeting of 7 and 8 December 2027; 3.75 to 4.00 is the current range. Columns may not sum to 100 because of rounding. The Fed treats each meeting date as tentative until it is confirmed at the meeting before it.
Markets lean above the Fed’s own projections after yields eased into the report
The Committee’s Summary of Economic Projections of 16 September put the median federal funds rate at 4.1% for the end of both 2026 and 2027, as set out in our report of 4 November. That median equals one more quarter-point increase from today’s 3.875% midpoint.
Eight participants placed the end-2027 rate a step higher, at 4.375%. That is the midpoint of the 4.25% to 4.50% range the futures now rank most likely.
Six participants sat at the median for 2027, and four below it. For this year, the futures part company with the four who saw two more increases, since they put no weight on a half-point move in December.
The same projections put the median for inflation, on the personal consumption expenditures index, at 3.7% for 2026. They see it slowing to 2.3% in 2027.
On 5 November, the eve of the report, the Treasury’s two-year par yield closed at 4.46%, down from 4.58% a day earlier. It stood at 4.67% on 28 October, the day of the Fed decision.
A month earlier, on 5 October, the two-year yield was 4.84%. The one-year yield eased to 4.28% on 5 November, from 4.39% a day earlier.
Even at 5 November’s close, the two-year yield sat 0.46 point above the 4.00% top of the policy range.
Treasury par yields (in %)
| Date | 1-year | 2-year | 10-year |
|---|---|---|---|
| 5 Oct | 4.47 | 4.84 | 5.31 |
| 28 Oct | 4.47 | 4.67 | 5.05 |
| 4 Nov | 4.39 | 4.58 | 4.90 |
| 5 Nov | 4.28 | 4.46 | 4.84 |
Daily par yield curve rates, end of day. 28 October is the day of the Fed decision; 5 November is the last close before the October jobs report.
What to watch:
The bureau publishes the October consumer price index on 10 November at 13:30 GMT.
The November employment report is due on 4 December at 13:30 GMT.
The Committee meets on 8 and 9 December, its last meeting of 2026, with new economic projections.
November consumer prices follow on 10 December at 13:30 GMT, the day after the decision.
Method: probabilities are from CME FedWatch for 6 November 2026 as of 15:20 GMT, with earlier columns as dated in the tool; yields are from the US Treasury’s daily par yield curve rates; policy figures are from the Federal Reserve’s FOMC statements of 16 September and 28 October 2026 and its Summary of Economic Projections of 16 September 2026; jobs figures are from the Bureau of Labor Statistics’ The Employment Situation for October 2026 (USDL-26-1632), released on 6 November 2026; implied rates are 100 minus the 30-day federal funds futures contract price; sums of probabilities, changes and spreads not attributed to a source are The Edge’s calculations.
Sources: CME Group, Federal Reserve, US Treasury, Bureau of Labor Statistics, The Edge.
