The Federal Reserve is expected to hold its benchmark rate at 3.75%–4.00% on Wednesday, October 28, 2026, with the decision due at 2:00 p.m. ET (2:00 a.m. Beijing time on October 29).Fed Chair Kevin WThe Federal Reserve is expected to hold its benchmark rate at 3.75%–4.00% on Wednesday, October 28, 2026, with the decision due at 2:00 p.m. ET (2:00 a.m. Beijing time on October 29).Fed Chair Kevin W
Fed Rate Decision October 2026: December Hike Odds and the QQQ, SPY Outlook
The Federal Reserve is expected to hold its benchmark rate at 3.75%–4.00% on Wednesday, October 28, 2026, with the decision due at 2:00 p.m. ET (2:00 a.m. Beijing time on October 29).
Fed Chair Kevin Warsh holds his press conference at 2:30 p.m. ET.
CME FedWatch put the probability of no change at about 93% at Tuesday's close, while pricing a roughly 75% chance of a 25-basis-point hike at the December 8–9 meeting.
For QQQ and SPY, the bigger risk is not a December hike, which is mostly priced in, but any signal that rates must keep rising into 2027.
Key Takeaways
- October hold expected: Markets price about a 93% chance the Fed keeps rates at 3.75%–4.00% after September's 25-basis-point hike.
- December mostly priced in: Futures imply roughly 75% odds of another hike on December 9, so confirming that path is unlikely to surprise markets on its own.
- The real test is 2027: Any hint that tightening continues past December would pressure the two-year Treasury yield, already near 4.74%.
- QQQ is more exposed than SPY: QQQ's concentration in technology and semiconductor stocks makes it more sensitive to rising yields than the broader S&P 500.
- What to watch on MEXC: Compare QQQUSDT and SPYUSDT returns, trading volume, funding and premium to index price across the 2:00 p.m. statement and 2:30 p.m. press conference.
Why Is the Fed Expected to Hold Rates in October Despite 3.7% Inflation?
The Fed is expected to pause because it hiked only six weeks ago, officials have said they want more data, and the meeting falls six days before the November 3 midterm elections. Inflation is still moving the wrong way, which is why markets read October as a pause in the hiking cycle rather than its end.
The September consumer price index rose 3.7% from a year earlier, up from 3.4% in August, while core CPI rose 2.6%.
Energy did most of the work: the energy index was up 20.4% over the year, and a 9.1% monthly jump in gasoline accounted for more than half of September's headline increase.
Oil remains elevated. On October 27, December Brent settled at $113.88 a barrel and December WTI at $99.90, both down nearly 2% as Iran diplomacy offset a Houthi claim of a strike on Saudi Arabia's Ras Tanura refinery.
The Fed raised rates by 25 basis points on September 16 in a 12–0 vote, its first hike since 2023.
Its September projections put the median year-end 2026 rate at 4.1%, consistent with one more hike: 12 of 18 officials saw 4.1%, four saw 4.4% and two saw 3.9%.
Those four officials matter, because 4.4% implies two more hikes this year, so the hawkish case already has supporters inside the committee.
A Reuters poll published October 24 found 94 of 100 economists expecting a hold this week, and all 100 expecting a December hike.
October brings no new economic projections, and Warsh has said he won't pre-commit to moves for the rest of 2026, so the statement wording and his answers in the press conference carry the signal.
Is a December Rate Hike Already Priced Into QQQ and SPY?
Largely, yes. FedWatch odds of a December hike stood near 75% on October 27, up from about 42% a month earlier, and every economist in the Reuters poll expects one. A statement that simply keeps December on the table should move markets less than any signal about how far the Fed goes after December.
The two-year Treasury yield, which tracks expectations for the policy path, rose 2.6 basis points to about 4.74% on October 27.
The 10-year yield ended near 4.99%, just below 5%.
The calendar adds pressure on this week's wording: October CPI is due November 10, and the December 9 decision lands one day before the November CPI report.
Whatever bar the Fed sets on Wednesday is the bar those two inflation reports will be judged against.
Why Could QQQ Fall More Than SPY After the Fed Decision?
QQQ tracks the Nasdaq-100, which is concentrated in large technology and semiconductor companies whose valuations rely on profits expected years ahead. When Treasury yields rise, those future profits are discounted more heavily, so QQQ tends to react more sharply than SPY, whose S&P 500 basket spans all 11 sectors.
US stocks head into the decision after a tech-led bounce.
On October 27, QQQ rose 1.27% to $721.25 and SPY gained 0.56% to $769.66, as chipmakers rallied for a third session, helped by enthusiasm around Anthropic's IPO filing.
That rally happened with the 10-year yield near 5%, which shows the two forces technology stocks are caught between: AI earnings optimism and expensive money.
SPY carries the same mega-cap names, but its wider sector mix cushions tech weakness, and some of its components, such as energy producers, benefit from oil near $100.
MEXC trading data has already shown how wide that gap can get.
In MEXC's October 22 QQQ analysis, QQQUSDT fell about 2.8% from the prior close while SPYUSDT fell about 1.2%, and roughly 1.6% of QQQUSDT's drop came before the Nasdaq opened.
That sell-off was not about rates: the 10-year yield fell about 17 basis points that day, and the trigger was Meta's AI spending.
The Fed decision tests the other half of the question, whether rising yields produce the same split between the two contracts.
What Fed Signals Could Move QQQ and SPY Most on October 28?
Three outcomes matter, and all start from a hold. A hold that keeps December open is the base case; a hold with language pointing to hikes beyond December is the hawkish surprise; a hold that makes December look uncertain is the dovish one. The two-year yield and the dollar will show which version markets heard.
Scenario 1: Hold, December Stays Live
This matches current pricing, so lasting moves in yields and stocks would likely be limited.
Attention would return quickly to the mega-cap earnings reports due later this week and their AI spending plans.
Scenario 2: Hold, With Signals of Tightening Into 2027
Stronger inflation language, a dissent in favor of an immediate hike, or Warsh stressing a faster return to 2% would all point here; three officials dissented in favor of a hike in July.
Short-term yields would likely rise first. If the 10-year yield pushes through 5%, pressure on growth valuations increases, and QQQ would likely underperform SPY.
The dollar, already near an 18-month high, could firm further, weighing on Bitcoin and other risk-sensitive assets.
Scenario 3: Hold, December Looks Less Certain
Lower odds of further tightening could pull yields down and give QQQ relief relative to SPY.
If the softer tone comes from weaker growth expectations rather than cooler inflation, though, stocks would not necessarily benefit.
How Can MEXC Traders Follow the Fed's Impact on QQQ and SPY?
MEXC lists USDT-margined perpetual contracts on QQQ and SPY that trade 24/7, so the reaction to the 2:00 p.m. ET statement and the 2:30 p.m. press conference can be followed through the Asian night. Price alone says little; pairing it with volume, funding and the premium to index price shows whether the derivatives market is adding pressure.
The contracts work like crypto perpetuals, as covered in this guide to trading stock futures on MEXC.
Relative return: Index both contracts to the same pre-statement price, such as 1:55 p.m. ET, and compare percentage moves. The October 22 baseline was a 1.6-point gap.
Volume and premium: On October 22, QQQUSDT traded about 2.97 million USDT in the regular session versus about 19.1 million USDT for SPYUSDT, and QQQUSDT held 5–7 basis points above its index price. A premium that widens or flips sign signals extra derivatives pressure.
Funding: QQQUSDT settles funding every eight hours, so the first settlement after the decision falls at 00:00 UTC on October 29, or 8:00 p.m. ET on October 28. Positive funding is a cost to longs, not a count of bullish traders.
Fair price: Unrealized PNL and liquidations are calculated on the fair price, not the last traded price; the difference between index price, fair price and last price matters most in fast markets.
After the US close, stock contracts can enter low-liquidity periods in which slippage rises and index prices can pause.
Four checkpoints frame the night: the 2:00 p.m. statement, the 2:30 p.m. press conference, the 4:00 p.m. close and the 00:00 UTC funding settlement.
Follow the reaction on the QQQUSDT perpetual contract on MEXC alongside SPYUSDT.
For eligible users considering share ownership, MEXC RealStocks is a separate route; check availability and supported securities directly.
Perpetual contracts do not confer shareholder rights and carry funding, leverage and liquidation risks, especially around major announcements.
FAQ
When is the Fed rate decision in October 2026?
The FOMC statement is due at 2:00 p.m. ET on October 28, 2026 (2:00 a.m. Beijing time on October 29), followed by Chair Kevin Warsh's press conference at 2:30 p.m. ET.
Will the Fed raise rates in October 2026?
A hike is unlikely. CME FedWatch priced about a 93% chance of a hold at 3.75%–4.00% at the October 27 close.
What are the odds of a Fed rate hike in December 2026?
FedWatch implied roughly 75% odds of a 25-basis-point hike at the December 8–9 meeting as of October 27, and the Fed's September median projection of 4.1% points to one more hike this year.
What is the current federal funds rate?
The target range is 3.75%–4.00%, set on September 16, 2026, when the Fed raised rates by 25 basis points.
Why could QQQ fall more than SPY after a hawkish Fed?
QQQ is concentrated in technology and growth stocks whose valuations are more sensitive to higher Treasury yields, while SPY spreads across all 11 S&P 500 sectors.
How could the Fed decision affect Bitcoin?
A signal of tightening into 2027 could lift yields and the dollar, which tends to weigh on Bitcoin and other risk assets; a softer outlook could ease that pressure.
How can I follow QQQ and SPY on MEXC after the decision?
Compare QQQUSDT and SPYUSDT percentage moves from the same starting point, then check volume, the premium to index price and the funding rate at the next settlement.
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The articles shared on this page are sourced from public platforms and are provided for reference only. They do not represent the position or views of MEXC. All rights belong to James Mitchell. If you believe any content infringes upon the rights of a third party, please contact [email protected] for prompt removal. MEXC does not guarantee the accuracy, completeness, or timeliness of any content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be interpreted as a recommendation or endorsement by MEXC. For expert insights and in-depth analysis, visit MEXC Learn.
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