Will The Fed Hike Again In October? Jeremy Siegel Says ‘Goldilocks’ Jobs Report Gives Warsh 'Cover To Hold' Ahead Of Midterms

• Markets are pricing in a 76.2% chance of no change in October, up from 29.1% a week ago, CME FedWatch data shows.
• Payrolls rose by 29,000 in September, and the unemployment rate edged up to 4.2%.
• Stocks can keep gaining if oil stays below $90 a barrel, Siegel says.

Jeremy Siegel, professor emeritus of finance at the Wharton School and senior economist at WisdomTree, said on Monday that the September jobs report gives Federal Reserve Chair Kevin Warsh a reason to hold interest rates steady this month.

The September 2026 U.S. jobs report showed nonfarm payrolls increasing by a lower-than-expected 29,000 jobs, while the unemployment rate ticked up to 4.2%.

Why The Fed May Hold Rates Steady In October 

After hiking benchmark interest rates by 25 basis points at its September meeting to a target range of 3.75% to 4.00%, Siegel said he thinks Warsh would not want to raise rates so close to the midterm elections slated for early November. 

In an interview with CNBC, Siegel said the “Goldilocks report” showed weak headline statistics, with only a few basis points of a rise in the unemployment rate and weak payrolls that largely showed “a lot of strength” below the surface.

“So the headline numbers give Warsh cover to hold on October,” the economist said, adding that the numbers “gave him the green light to do so.”

According to data from the CME FedWatch tool, the market puts the odds of the Fed holding rates steady in October at 76.2%, up from 29.1% a week ago. 

Why Stocks Have Held Up Despite Rising Yields

Siegel said in the interview that despite the “tremendous rise” in bond yields, the stock market has held up. The economist said that he believes the rise in rates is not because of inflation or a rising federal deficit, but because of increased growth expectations. 

In recent weeks, bond yields have also shot up to historic highs, with the 10-year Treasury yield climbing over 5.3% last week.

As per Siegel, if oil prices stay below $90 a barrel, even if the war with Iran escalates before the midterms, stock markets can continue their rally into the fourth quarter. 

At the time of writing, the SPDR S&P 500 ETF (SPY) was up 0.07% overnight, with retail sentiment in the ‘extremely bullish’ territory.  

The Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) also gained 0.14% and 0.04%, respectively, amid ‘extremely bullish’ sentiment each. 

SPY has gained 14.5% so far in 2026, while QQQ has rallied over 23% and DIA has climbed nearly 8% year to date. 

Siegel Sees Bond Yields Above 5%

When asked where yields may be headed, Siegel said he believes they may trend around 5% plus for the rest of the year.

While noting that rates could come down, as forecasted by Fundstrat’s Tom Lee, it was far more likely for rates to stay elevated. 

“Every single major developed market has had dramatic rises in interest rates. And all of that has been real interest rates. You know, my measures of inflationary expectations long-term are not up at all,” he said, noting that one of the key reasons that rates are rising across the globe is due to “economic growth worldwide.”

At the time of writing, the iShares 20+ Year Treasury Bond ETF (TLT), which tracks U.S. long-term Treasuries, was up 0.08% amid ‘bullish’ sentiment.

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