The storm - which weakened to a tropical depression, before regaining its strength as it hit the Gulf of Mexico, is set to hit the United States on Monday or Tuesday.
A tropical storm warning is now in effect for the coast of the Florida Panhandle from Navarre to the Wakulla/Jefferson County line, meaning tropical storm conditions are expected somewhere within the warning area in the next 24 hours.
Fred is currently whipping up winds of 40mph, although meteorologists expect them to pick up speed as they approach the Sunshine State.
Alabama Governor Kay Ivey - whose state is also at risk of being hit by Fred - says her officials are monitoring the weather event and 'will be ready to act from the state level if needed.'
Meanwhile, another Tropical storm - Grace - has emerged just behind Fred, and is currently bringing heavy rain and winds to the Caribbean.
Grace is forecast to pass over Cuba on Tuesday, and could bring downpours to Florida and the Bahamas later this week. The storm is currently forecast to travel across the Gulf of Mexico, and could also bring extreme weather to parts of Louisiana.
Puerto Rico and the Virgin Islands are under tropical storm warning, the Weather Channel said.
Haiti is on storm watch, as the country braces for Grace just days after a 7.2 earthquake left more than 700 dead, and close to 3,000 injured.
The National Hurricane Center said that rainfall from Grace may lead to flash, urban and small stream flooding, along with potential for mudslides.
Fred was located early Sunday about 335 miles south-southeast of Pensacola, Florida, and moving north-northwest at 12 mph.
Grace had maximum sustained winds around 40 mph. The storm was moving west-northwest at 16 mph.