- October Fed rate hike odds collapsed from ~75% to 17% — a new cycle low — after the September jobs report
- Polymarket's October hike contract shows 83% probability of no change, $23.1M in volume
- The Kobeissi Letter flagged "insane volatility" in the bond market following the jobs data
- The 58-percentage-point repricing occurred within days, driven by a single weaker-than-expected labor print
Rate hike expectations for the Federal Reserve’s October meeting have collapsed to a cycle low of 17% — down from nearly 75% just days earlier — after the September jobs report came in weaker than expected, according to @KobeissiLetter.
The swing represents one of the sharpest single-event repricing events in recent Fed expectations history. Polymarket’s “Fed Decision in October?” prediction market captured the move in real time: the probability of a 25 basis point hike plunged from the high-70s range to 17%, while the “no change” probability surged to 83% — with $23,129,674 in volume logged on the contract.
The Kobeissi Letter, which flagged the move, noted the bond market is experiencing “insane volatility” as traders unwind rate-hike positioning at speed. A weaker labor market print directly reduces the Fed’s justification for further tightening — the transmission mechanism is straightforward: fewer jobs added signals cooling demand, which reduces inflationary pressure, which removes urgency for rate increases.
The speed of the repricing — from near-certainty to long-shot within days — reflects how tightly bond markets are now keyed to labor data. For crypto markets, a dovish Fed pivot in expectations has historically reduced the opportunity cost of holding risk assets. The macro backdrop shifted materially on this single data point. Markets that were pricing in monetary tightening are now pricing in a hold, and that shift is being felt across asset classes in real time.
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Source: Kobeissiletter · Published by CoinsProbe Markets Desk
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