The contract fell steadily through the morning, before any Fed official spoke, and touched its low at 1:44 p.m. It now sits close to where futures price an October increase.
Prediction Markets · FinancialMarkets.com · October 6, 2026 · Tickers: SHY, TLT, HOOD
On Monday, a burst of buying lifted Kalshi's contract on an October rate increase by 4 to 5 cents in minutes. On Tuesday, the contract gave it all back, with no single trade or headline to explain either move.
The contract pays out if the Federal Reserve raises rates by a quarter point at its Oct. 28 decision. It opened Tuesday's trading at 21 cents, implying about a 21% chance of an increase. It printed 20 cents at 5:11 a.m. Eastern and 18 cents at 7:51 a.m., on about 5,000 contracts. A block of about 14,000 traded at 19 cents at 9:41 a.m. The low came at 1:44 p.m., at 17 cents.
The timing
The slide began before any Fed official spoke. The first scheduled appearance, a 9:05 a.m. panel with New York Fed President John Williams, came after the drop to 18 cents. Fed Governor Michelle Bowman's remarks were about bank supervision, and Kansas City Fed President Jeffrey Schmid's conversation began at 1:15 p.m. The most explicit advocate of further increases, Dallas Fed President Lorie Logan, is scheduled after the close.
The broader market moved in the same direction. The 10-year Treasury yield fell about 4 basis points to roughly 5.27%, from its highest close since 2002 on Monday, and the two-year yield eased to about 4.80%. Brent crude dropped below $98 in the morning before recovering.
Kalshi versus futures
At 17 to 18 cents, the Kalshi contract now sits close to fed funds futures, which price about a 20% chance of an October increase. On Monday afternoon, at 22 cents, Kalshi had been a few points above that. Futures still put the odds of an increase by December at about 86%.
The October odds had already come down sharply. At the end of September, before the September jobs report, futures priced about a 70% chance of an October move. Payrolls rose by only 29,000 in September and unemployment reached 4.2%, which shifted expectations toward a later increase.
Explaining the swing
A two-day round trip with no clear catalyst leaves several explanations open. Monday's buyer may have been hedging a position elsewhere and unwound it. Traders may have aligned Kalshi with futures once yields started to fall. Or a market thinner than futures may simply be more prone to swings when a few large orders arrive. The trades themselves do not distinguish among these.
Wednesday's minutes
Minutes of the Fed's September meeting, when it raised rates for the first time since July 2023, arrive Wednesday afternoon. The September consumer price index on Oct. 14 is the last major data point before the meeting. Whether the contract stays in line with futures through those releases will show if Monday's move was an outlier or the start of a wider gap.