Jim Cramer Highlights Falling Interest Rate Potential as Fed Hike Odds Decline

CNBC host Jim Cramer sparked discussion on social media with a post emphasizing the potential for falling interest rates. On October 6, he tweeted, ‘OMG Interest rates can fall, too!!’ This statement came as the odds of a Federal Reserve rate hike at the October 28 meeting dropped to 21.6%, according to the CME FedWatch Tool. Currently, traders are betting a 78.4% chance that the central bank will maintain its current target interest rate.

The shift in expectations follows the Fed’s September 16 decision to raise its benchmark rate to 3.75%, 4.00%, the first increase since 2023. Officials cited the need to align with the 2% inflation target, referencing August’s Personal Consumption Expenditures inflation figure of 3.4%. Higher borrowing costs have pressured rate-sensitive sectors, with Home Depot’s shares dropping 6.52% between September 16 and October 1, marking an 18.29% decline since the start of 2026. In the bond market, the 10-year Treasury yield closed near 5.24% on October 1, up from around 4.16% at the beginning of the year.

Despite the increased likelihood of an October pause, futures pricing suggests higher probabilities for rate hikes in December and January. The December 9 meeting has an 86.2% chance of a hike, while the January 27, 2027 meeting shows a 92.2% probability. The stock market has performed well year-to-date, with the S&P 500 advancing 13.35%, the Nasdaq Composite up 18.26%, and the Dow Jones gaining 5.96%. Key ETFs like SPY, QQQ, and DIA closed higher on Monday, with premarket gains continuing on Tuesday.