Which Fed policymaker is still forecasting one more rate hike this year while markets price just a 38% chance for October?

Key Highlights

• Neel Kashkari of the Federal Reserve said in comments reported on October 1, 2026 that Inflation still needs to be contained and forecast one more rate hike this year, a hawkish signal against softer data.
• The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) tracks medium-term Treasuries, which reacted to a split Fed, with CME FedWatch pricing a 38% chance of an October 28 hike.
• New York Fed President John Williams argued on September 29 that only one more hike late this year might be appropriate, which implies a later timetable than October.
• The Federal Reserve raised its policy rate by a quarter point on September 16, and officials are divided over how many more increases are needed.

What Kashkari Signaled

Kashkari, president of the Minneapolis Fed, said inflation still needs to be contained and that he expects one more rate hike this year. The comment arrived the morning after softer August inflation data cut market odds of an October 28 hike to 38%. His forecast does not specify the timing, so it fits either an October or a later move. The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) sits at the center of this debate because medium-term yields respond to expected policy. The message is that the Fed is not finished, even if the data are cooling, and that officials want clear evidence before declaring victory over inflation.

A Committee Looking for Evidence

Kashkari's view is close to that of Williams, who said only one more hike "late this year" might be appropriate. That suggests the committee leans toward one more increase but is not rushing. Other officials have been more hawkish: Cleveland Fed President Beth Hammack warned against letting the public accept elevated prices as normal, and Philadelphia Fed President Anna Paulson signaled modest additional tightening could be needed. A split committee makes each data release matter, because a stronger-than-expected jobs report could pull the timeline forward. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) responds more to long-term inflation expectations.

Why Timing Matters

Whether the next hike comes on October 28 or later changes the path of borrowing costs. The 10-year Treasury Yield is near 5.2%, and Freddie Mac's 30-year Mortgage rate reached 7.03% last week. Oil, which rose more than 14% in September, remains the biggest source of inflation risk. If inflation keeps slowing and jobs soften, a single late-year hike could prove unnecessary. If energy prices climb, more than one hike is possible. The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) will trade on those scenarios, and investors should expect Volatility around every data release.

Where Things Stand

The official forecasting one more rate hike this year is Kashkari, and his comment shows the hawkish wing of the Fed is intact despite lower market odds for October. The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) reflects a market debating whether the next move comes now or later. The balance of evidence points to one more hike being possible but not locked in. The next catalysts are Friday's jobs report and the October 28 Fed decision.