Fed Week: The Risk of an October 28 Rate Hike Has Nearly Faded, Earnings and Expiry Ahead

Fed Week: The Risk of an October 28 Rate Hike Has Nearly Faded, Earnings and Expiry Ahead

The most unpleasant scenario for October is nearly off the table. According to CME FedWatch, on the morning of Saturday, October 24, the market priced the chance of the rate being held at the October 28 meeting at 90%, and a hike at just 10%.

As recently as Tuesday, October 20, the probability of a hike was 17.2%. Over four days, it fell by 7.2 points.

What the market is pricing in

The question of a hike is not closed, though, just postponed. For December, the market was pricing in a probability of about 76%, so the Fed's signals about its next steps may turn out to matter more than the decision itself.

In our view, this is a positive shift. The market will not have to digest a rate surprise in the middle of a busy week.

The week's calendar

• October 28, 14:00 New York time - Fed rate decision
• October 28 after the close - Microsoft and Alphabet earnings
• October 29, 8:30 New York time - US third-quarter GDP and September PCE inflation
• October 29 - Amazon, Apple, Coinbase and Strategy earnings
• around October 29 - a mining difficulty increase, estimated at roughly 5%
• October 30 - expiry of monthly bitcoin options worth about $12.3 billion

The October 30 expiry

On Friday, monthly bitcoin options worth about $12.3 billion expire, mostly on Deribit. The max pain point is $79,000, and the put/call ratio is 0.62.

A ratio below one means there are more calls than puts in open interest. On Sunday, bitcoin stood at about $80,477, roughly $1,477 above max pain, but the price does not have to gravitate toward that level by expiry.

What this means for an arbitrage trader

From what we see, spreads between exchanges widen in the minutes around macro releases and major expiries, and funding on perps can quickly flip sign.

We believe that in a week like this it makes sense to keep a margin buffer on each leg of a trade. Especially ahead of 14:00 on October 28 and 8:30 on October 29, New York time.

Our tools

Around the Fed decision and the expiry, prices on exchanges diverge unevenly, and the gaps are easier to catch when all venues are visible at once. Our arbitrage screener keeps dozens of venues in one window, refreshes quotes every second and shows each gap together with the volume actually behind it. The spread calculator helps you check what survives fees, network costs and slippage at your size. The bot is fully manual. It never connects to your exchange API keys.

To test the tools on a live market, ArbitrageScanner offers one day of free access to the whole ecosystem.

FAQ (Frequently Asked Questions)

1. Will the Fed raise rates on October 28, 2026?

According to CME FedWatch, on the morning of October 24 the market priced the chance of a hike at 10% and a hold at 90%. The decision will be announced on October 28 at 14:00 New York time.

2. What does the market expect from the Fed in December?

For December, the market was pricing in a probability of a rate hike of about 76%.

3. When is the bitcoin options expiry in October 2026?

October 30. Monthly options worth about $12.3 billion expire, mostly on Deribit; the max pain point is $79,000, and the put/call ratio is 0.62.

4. Which earnings and macro data are out this week?

On October 28 after the close, Microsoft and Alphabet report, and on October 29, Amazon, Apple, Coinbase and Strategy. The same day at 8:30 New York time, US third-quarter GDP and September PCE will be released.

Conclusion

The risk of a Fed rate hike on October 28 has nearly faded: FedWatch puts the chance of a hold at 90% and a hike at 10%. December, however, remains an open question.

It is a busy week: the Fed, earnings from the largest companies, GDP and PCE, and a $12.3 billion options expiry. An arbitrage trader should keep a margin buffer around each release and calculate costs before entering.

IMPORTANT! We are software developers. We do not give recommendations or promises of earnings and we do not advise you to invest your money anywhere. Our software is fully manual, all your money stays under your own control. We show examples of how our clients have earned on arbitrage in the past, but we do not advise repeating those actions one to one. Your earnings depend solely on your own actions and on market factors.