MACRO UPDATE | OCTOBER 7, 2026

Another rate hike is still on the table. Now CPI has to tell us whether the Fed needs it.

Earlier this week, I laid out the question that matters for October:

Is the Fed's tightening actually working?

Today's Fed minutes don't answer that question.

But they do tell us something important about how the Fed is thinking about it.

Most Fed officials believe another interest-rate increase could still be appropriate before the end of the year.

That doesn't mean another hike is guaranteed.

It means the September hike may not have been the end.

The important part of today's news isn't that the Fed suddenly became more aggressive.

It's that policymakers aren't convinced their job is finished.

They're still concerned enough about inflation to keep another hike on the table.

At the same time, they haven't committed to making that move.

Future decisions still depend on the incoming data.

And that brings us directly back to the framework from the first October letter.

One of the three paths we laid out was:

INFLATION STILL REQUIRES MORE RESTRAINT

The idea was simple.

If inflation remains too hot while the economy and labor market remain resilient enough to withstand additional tightening, the Fed may have to do more.

Today's minutes tell us that possibility is already alive inside the Fed.

What they don't tell us is whether the economy will actually give policymakers a reason to act on it.

That's why the next inflation report matters.

Going into CPI, I'm not asking whether the Fed can raise rates again.

We already know the answer.

They can.

And most participants believe another increase could be appropriate this year.

The question is whether the inflation data gives them a reason to do it.

A cooler report would provide evidence that the restraint already in place may be beginning to work.

A hotter report would strengthen the argument that inflation still isn't responding enough—and make the possibility of additional tightening harder to dismiss.

That's the update.

Another hike is still on the table.

Now CPI helps tell us whether the Fed actually needs to use it.

— Theo
Founder, Tribe Trades