Will the Fed cut rates more than 25 bps in 2026?
🗂 Part of event: Will the Fed do a rate cut greater than 25bps this year? →💡 What the odds say
The market puts this at about a 9% chance — very unlikely.
No money — just record your call and see if you were right. Yes is at 9% right now.
Despite the Fed's 2025 projection of just one 25 bps cut, the market now sees virtually no chance of a larger cut, as recent broker calls and geopolitical tensions have shifted expectations toward no change or even a hike.
📊 Base rate: Since 2000, the Fed has cut rates by more than 25 bps in a single year only during recessions (2001, 2007-2008, 2020), occurring in about 20% of years, making the current 9% odds low but not extreme.
What's driving it
- • Most brokerages now see no Fed policy change in 2026, as reported by Reuters on June 23, 2026, solidifying the no-cut view.
- • BofA and Deutsche Bank expect a rate hike in September 2026 (Reuters, Jun 22), pushing odds further toward no cut.
- • Middle East conflict driving up energy prices has raised doubts about rate cuts (Reuters, Mar 3), fueling inflation concerns.
- • The Fed's own December 2025 projection of only one 25 bps cut for 2026 (Reuters, Dec 10) sets a low baseline for a larger cut.
The case for YES
- • If the economy deteriorates sharply, the Fed could cut more aggressively, as it did in 2020 and 2008.
- • Brokerages in December 2025 still stuck with rate cut forecasts despite Fed caution (Reuters, Dec 11), suggesting underlying expectations for easing.
- • The 2025 global easing push (Reuters, Dec 23) shows central banks are willing to cut significantly when needed.
The case for NO
- • Recent broker surveys (Reuters, Jun 23) show no expectation of policy change, let alone a cut over 25 bps.
- • Major banks are even forecasting a rate hike (Reuters, Jun 22), which would be the opposite of a cut.
- • The Fed's December projection of just one 25 bps cut (Reuters, Dec 10) makes a larger cut unlikely, and subsequent geopolitical inflation risks have reinforced that.
What to watch
- • September 2026 FOMC decision: if the Fed holds or hints at tightening, No odds will rise; any surprise cut would boost Yes, but unlikely.
- • August 2026 CPI release: higher inflation would decrease Yes odds; lower inflation could slightly increase them.
- • Any escalation in Middle East conflict (Reuters, Mar 3) would further reduce Yes odds by increasing energy prices.
Sources
AI-generated · grounded in recent news + odds · informational only, not advice. Verify on the source platform.
Data from Kalshi’s public API, for informational purposes only. PredictPal is not affiliated with any platform and does not facilitate trading.
Discussion
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How it resolves
Settled by Kalshi, a CFTC-regulated US exchange, against the official source named in each contract (e.g. a government release or election certification), with an Outcome Review Committee as a backstop for disputes.
Resolution criteria
If the Federal Reserve cuts rates by more than 25 basis points before Dec 31, 2026, then the market resolves to Yes.
ⓘ A market settles under its own written rules, which can lag what looks decided in the news — so the price may not move to 100% the moment an outcome seems obvious.
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