Expectations for a December Fed rate hike strengthen
Market expectations that the Federal Reserve (Fed) could raise interest rates at its December meeting remain elevated.
Market assessment dated November 2, 2026, futures markets are pricing in approximately a 72% probability of a 25-basis-point rate increase. Following the Fed's decision to hold its benchmark interest rate steady at 3.75%–4.00% in October, investors have focused on how elevated energy costs and persistent inflationary pressures could influence the future direction of monetary policy.
Rising oil prices and inflation remaining above the Fed's target are among the factors supporting the possibility of continued monetary tightening. Meanwhile, economic growth and labor market data will play a decisive role in determining the timing of any additional rate increase. Manufacturing data and the nonfarm payrolls report scheduled for release this week could shift expectations for December. Investors are closely monitoring potential signals from the Fed for their implications for the U.S. Dollar Index, Treasury yields, gold prices, and equity markets.
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