Recent softening in the U.S. labor market, including September nonfarm payrolls rising just 29,000 with unemployment at 4.2%, has reduced the implied probability of a Federal Reserve rate hike at the October 27-28 FOMC meeting while keeping December tightening in focus. Headline CPI eased to 3.2% year-over-year in September with core at 2.2%, the lowest since early 2021, aided by slower shelter costs, though the Fed’s preferred PCE gauge remains elevated near 3%. Officials, including Waller and Musalem, continue to signal additional hikes are likely needed to return inflation to the 2% target, with market pricing centered on a possible December move and no cuts through year-end. The October 14 CPI release and October 28 decision represent the immediate catalysts shaping trader positioning around the federal funds rate path.