Jim Cramer Says ‘Interest Rates Can Fall, Too!!’ as October Fed Hike Odds Fall to 21.6% — Here’s What Traders Are Betting On

Key takeaways

• Cramer’s warning comes amid a Fed pause outlook that still leaves a steep probability of future hikes, keeping borrowing costs high and pressuring rate‑sensitive stocks.
• Fed rate hike to 3.75%-4.00% on Sept. 16
• 21.6% probability of Oct. 28 hike
• 78.4% probability of Oct. 28 pause

What happened

Jim Cramer tweeted that interest rates could fall, coinciding with the CME FedWatch Tool showing a 21.6% chance of a rate hike at the Fed’s October 28 meeting, while futures traders price in a 78.4% chance the Fed will keep rates unchanged. The Fed’s September 16 rate hike to 3.75%–4.00% was its first increase since 2023, based on August PCE inflation of 3.4%. Home Depot shares fell 6.52% from Sept. 16 to Oct. 1, adding to an 18.29% loss for 2026, and the 10‑year Treasury yield rose to about…

Why it matters

The Fed’s policy shift and the market’s pricing of future hikes influence borrowing costs, corporate earnings, and equity valuations, especially for rate‑sensitive sectors. Cramer’s comment highlights investor concern that higher rates could dampen the stock market, while the FedWatch probabilities suggest a…

Short-term and longer-term

Short-term. Over the next few days, traders should watch the Fed’s October 28 meeting for any sign of a pause or reversal, as futures pricing currently favors a hold.

Longer-term. For investors looking ahead, the Fed’s trajectory points to a continued tightening cycle through early 2027, which could compress earnings growth for rate‑sensitive sectors.