Fed rate cut by...?

Resolution Criteria

This market will resolve to “Yes” if the upper bound of the target federal funds rate is decreased at any point between December 16, 2025 and the completion of the Federal Open Market Committee (FOMC) meeting for January 2026, currently scheduled for January 27-28. Otherwise, this market will resolve to “No”. If no January meeting takes place by February 7, 2026, 11:59 PM ET, and no qualifying rate cut has been announced, this market will resolve to "No". Emergency rate cuts will qualify. The primary resolution source for this market will be the official website of the Federal Reserve (https://www.federalreserve.gov/monetarypolicy/openmarket.htm), however a consensus of credible reporting may also be used.

The Federal Reserve rate cut prediction market is currently most heavily concentrated on a December 2026 meeting resolution, with October and September also drawing substantial volume. The market covers whether the Fed will cut its target federal funds rate upper bound at any FOMC meeting from December 2025 through the window specified, with official Federal Reserve announcements serving as the resolution source.

Market structure

The market spans eight possible outcomes corresponding to different FOMC meeting windows, from a near-term December 2025–January 2026 window through meetings later in 2026. Volume is broadly distributed across several outcomes, with the heaviest concentration on a December 2026 resolution, followed by October and September. Resolution relies on the official Federal Reserve open market operations page, with credible media consensus as a fallback. Emergency cuts qualify.

Background

The Federal Reserve has held its benchmark federal funds rate at elevated levels following an aggressive tightening cycle that began in 2022 to combat post-pandemic inflation. After cutting rates in late 2024, the Fed signalled a more cautious approach to further easing entering 2025, citing persistent inflation and a resilient labour market. Markets have been closely watching each FOMC meeting for signals about the pace and timing of any additional cuts. The timing of Fed easing has significant implications for mortgage rates, corporate borrowing costs, equity valuations, and the broader macroeconomic outlook, making Fed rate decisions among the most closely tracked events in global finance.

Key factors

Several structural forces bear on when the Fed might next reduce rates. Inflation data — particularly CPI and PCE readings relative to the Fed's 2% target — directly influences the FOMC's stated conditions for easing. Labour market strength, as measured by non-farm payrolls and unemployment, factors into the Fed's dual mandate assessment. GDP growth trajectory and any signs of economic slowdown could accelerate or delay cuts. External shocks, including geopolitical developments or financial market stress, could trigger emergency action outside scheduled meetings. Fed Chair communications, including post-meeting press conferences and congressional testimony, shape market interpretation of the committee's reaction function. Changes in committee composition, including any new appointments, could also shift the median policy preference. The resolution window is specific: a cut must occur between 16 December 2025 and the conclusion of the January 2026 FOMC meeting to resolve this market 'Yes' for the earliest outcome.

FAQ