The Kobeissi Letter, a markets commentary publication, reported on X today, October 2, 2026, that market expectations for a Federal Reserve rate hike in October have plummeted. The publication stated, "BREAKING: Market expectations for an October rate hike fall to a new low 17% chance after the weaker than expected September jobs report. Just days ago, markets saw a near 75% chance of an October rate hike. We are seeing some insane volatility in the bond market."
This significant shift follows the release of the September jobs report, which showed the US economy added only 29,000 jobs, falling well short of the 89,000 expected. The unemployment rate also rose to 4.2%, exceeding forecasts of 4.1%. Recent Gokhshtein coverage, including Peter Schiff's view on a weak labor market and Nick Timiraos's report on a Fed Vice Chair hinting at rate hike delays, has highlighted the ongoing debate around the Fed's policy path.
The Kobeissi Letter's observation implies that the unexpectedly soft labor market data has dramatically altered market participants' outlook on the Federal Reserve's immediate monetary policy. The abrupt decline in rate hike odds suggests that bond markets are now pricing in a much higher probability of the Fed pausing its rate hikes, potentially in response to signs of economic cooling. This development indicates market sensitivity to incoming economic data and its potential influence on future Fed decisions.
