Will 1 Fed rate cut happen in 2026?

The 27¢ Polymarket price implies only a 27% probability of at least one Fed rate cut in 2026, but this significantly underprices the risk compared to Kalshi's 16¢ valuation—an 11-cent gap suggesting Polymarket traders are more dovish on rate cuts than the broader market. The extraordinarily high implied yield of 382.6% on the Yes side reflects the low absolute price, though with only $2,092 in 24-hour volume against $93k open interest, liquidity is thin and the spread remains tight at just 1¢. With 258 days to expiry and a neutral regime score, this market appears fairly stable, but the cross-venue arbitrage opportunity and skewed risk-reward (382% vs 52% on No) warrant close monitoring for potential repricing as 2026 approaches.

Resolution rules

This market will resolve according to the exact amount of cuts of 25 basis points in 2026 by the Fed (including any cuts made during the December meeting). Emergency rate cuts outside of scheduled FOMC meetings will also count toward the total number of cuts in 2026. This market will remain open until December 31, 2026, 11:59 PM ET, to account for any such emergency actions. For example, if the Fed cuts rates by 50 bps after a meeting, it would be considered 2 cuts (of 25 bps each). This market will resolve early to "No" if the specified number of cuts becomes impossible — i.e., if more cuts have already occurred than the strike in question. Note that cuts between 1–24 bps (inclusive) will also be considered 1 rate cut. The resolution source for this market will be FOMC statements after meetings scheduled in 2026 according to the official calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. The level and change of the target federal funds rate is also published at the official website of the Federal Reserve at https://www.federalreserve.gov/monetarypolicy/openmarket.htm.

Indicators

Regime

Trade