The FXIFY Trading Desk Brief: Week of 26 October 2026

Situation Report

The October 28 FOMC hold is the most widely anticipated outcome of the current rate cycle. As of Wednesday 22 October, Kalshi and Polymarket both put the probability of a hold at 94%. CME FedWatch sits at 86%. A Reuters poll of 100 economists run October 16-20 found 94 of 100 expecting no change on October 28, and all 100 expecting a hike in December. As of Monday 21 October, the dollar index closed at 101.99 and the 10-year Treasury yield stood at 5.14%.

But there is a complication that makes this week more consequential than a priced-in hold would normally suggest. A partial government shutdown has delayed the BLS September employment situation report and the September CPI release. The Fed votes on Wednesday without official jobs data and without official inflation data for September. The BLS has postponed both releases indefinitely pending a resolution of the funding gap. ADP’s private payroll estimate showed a 32,000-job loss in September. That is the labour market data the committee is working with.

This changes the nature of Wednesday’s press conference significantly. Warsh cannot point to official data confirming the economy is softening. He cannot point to official data confirming it is resilient either. The committee is making its decision without complete official data on September labour market conditions or September consumer inflation, and Warsh’s press conference language will be the market’s only read on how the committee is interpreting the incomplete picture it has.

The week does not end at Wednesday. Q3 GDP advance estimate and September Core PCE both land Thursday 29 October alongside Personal Income and Outlays. Those are the first major economic readings the market will have after the Fed votes.

This Week’s Events

Wednesday, 28 October — FOMC Rate Decision and Press Conference (USD) | 6:00 PM GMT

The Federal Reserve announces its rate decision at 2:00 PM ET. This is not an SEP meeting. No updated dot plot. No new economic projections. The signal comes entirely from the statement language and Warsh’s press conference at 2:30 PM ET.

The decision itself is settled at 94% probability of a hold at 3.75%-4.00%. October hike probability has fallen to 6% on Kalshi following the Reuters poll. Energy-driven CPI, political proximity to the November 3 midterms, and the government shutdown preventing clean data delivery all pointed the same way.

What is not settled is the press conference. Warsh has two choices. He can deliver a hawkish hold, affirming that the next hike is coming in December, that the committee is committed to returning inflation to 2%, and that the incomplete data situation has not changed its resolve. That outcome supports the dollar and validates current December pricing. Or he can deliver a neutral hold, stressing data dependence, noting the committee needs complete information before making its next move, and avoiding any explicit December guidance. That outcome would compress December hike probability and weaken the dollar.

A third scenario, a surprise hike, carries 6% probability on Kalshi. Given the government shutdown and the political calendar, the bar for this outcome is high.

Three vote outcomes to watch. A unanimous 12-0 hold signals the committee is unified on skipping October. A hold with dissents in favour of hiking would signal the hawkish minority is growing and December is under pressure to deliver. A hold with dissents in favour of a cut would be unexpected given that cut pricing is near zero and would likely generate a sharp market reaction.

What traders are watching:

Hawkish hold: Statement affirms December is live. Dollar strengthens. 10-year yield holds above 5.0%. December hike probability holds near 90%.

Neutral hold: Language emphasises data dependence and incomplete information. December hike probability falls toward 70%. Dollar weakens modestly.

Surprise hike: Dollar surges. Yields spike. Risk assets sell off sharply.

Thursday, 29 October — Q3 GDP Advance Estimate (USD) | 12:30 PM GMT

The Bureau of Economic Analysis releases the first estimate of Q3 2026 real GDP growth at 8:30 AM ET. This is the first comprehensive read on how the US economy performed in the July-September quarter.

Q2 GDP was revised up to 2.2% annualised in the third estimate. For Q3, economists are projecting a slowdown toward the 1.5-2.0% range based on the data available. Consumer spending has been mixed. August retail sales beat estimates, though the control group showed limited underlying momentum. Official September retail data has not been released due to the government shutdown. The contribution from government spending may be negative given the partial shutdown affecting federal outlays. Net exports and inventory changes will also be in focus.

A Q3 GDP print above 2.0% would challenge the soft-landing concerns that have driven October hold pricing and add to the case for December tightening. A print below 1.0% would revive slowdown concerns and could compress December hike expectations.

What traders are watching:

Above 2.0%: Economy is absorbing 4.00% rates without major damage. Consistent with December hike.

Below 1.0%: Growth is slowing more than expected. Reduces the urgency of further tightening and may move December probability lower.

Thursday, 29 October — Core PCE September (USD) | 12:30 PM GMT

The BEA releases September Personal Income and Outlays alongside the GDP report at 8:30 AM ET. This includes September Core PCE, the Fed’s preferred inflation measure, and is the first official inflation data point covering September given the BLS shutdown delay.

August Core PCE came in at 3.0% year-on-year following the BEA’s annual methodology revision. The Cleveland Fed nowcast for September Core PCE projects approximately 2.8% year-on-year, reflecting the expected easing of energy-adjacent price pressures in September and continued shelter cost moderation. If confirmed, a 2.8% reading would represent a meaningful step below the revised August reading of 3.0%.

This is the most closely watched data point of the week for the December rate path. September Core PCE below 2.8% would validate the disinflation story and raise a genuine question about whether December is still necessary. A reading above 3.0% would strengthen the case for a December hike significantly.

The key number: September Core PCE year-on-year. Below 2.8% leans dovish on December. Above 3.0% validates December.

What traders are watching:

Higher than expected: Confirms inflation is still not cooperating. December hike probability holds above 85%. Dollar firms.

In line or lower: Disinflation is continuing. December debate opens. Dollar softens.

The Call

Three significant releases land across two days this week. Wednesday’s press conference sets the tone. Thursday’s GDP and PCE resolve the data picture that the shutdown has obscured.

The asymmetric risk this week is on the dovish side of Wednesday’s press conference. The hawkish outcome, where Warsh delivers a firm December signal, is already largely priced at 90% December probability. The dovish or neutral outcome, where Warsh signals the committee needs clean data before committing to December, would move markets more from current pricing than the hawkish outcome would.

On Thursday, the direction of surprise that would move markets most is the opposite. A September Core PCE reading above 3.0% would challenge current December pricing more than a soft reading would, given that futures already reflect a disinflation trajectory.

The government shutdown is the wildcard that does not appear in any pricing model. If the BLS September NFP and CPI reports are released before the end of this week, they would immediately become the most closely watched data of the week regardless of what GDP and PCE say. That scenario warrants monitoring given the unpredictable timeline of a funding resolution.

Watch the dollar index. It has been consolidating near 102 this week. A hawkish Warsh press conference would likely support a move above 102.5. A neutral or dovish press conference would likely weigh on the dollar index.

Watch gold. It surged after the weak September NFP and has held gains through the October hold repricing. A surprise hike on Wednesday would likely weigh on gold. A dovish press conference followed by a soft PCE would likely push it higher.

The December 9 FOMC meeting is now the centre of gravity for rate markets. Everything Wednesday and Thursday says feeds directly into that pricing.

Calendar

Date	Event	CCY	Time GMT	Impact
Wed 28 Oct	FOMC Rate Decision	USD	6:00 PM	CRITICAL
Wed 28 Oct	Warsh Press Conference	USD	6:30 PM	CRITICAL
Thu 29 Oct	Q3 GDP Advance Estimate	USD	12:30 PM	HIGH
Thu 29 Oct	Core PCE September	USD	12:30 PM	CRITICAL
Thu 29 Oct	Personal Income and Outlays	USD	12:30 PM	MEDIUM

Upcoming tier-one releases:

• Fri 7 Nov: October NFP (pending BLS shutdown resolution)
• Tue 10 Nov: October CPI (pending BLS shutdown resolution)
• Tue 9 Dec: FOMC rate decision

Risk Notice

Make sure you understand how your FXIFY account drawdown rules work before trading around this week’s releases. Wednesday and Thursday both carry elevated volatility risk. The FOMC press conference and Thursday’s simultaneous GDP and Core PCE releases are capable of generating sharp, multi-directional moves across USD pairs, bonds, equities, and commodities. For more on managing volatility as a funded trader, see our guides on trading styles for funded traders and how news events affect prop traders.