Will the Fed’s lower bound reach 0.25% or lower before 2027?

This market is pricing in an extremely low 5% probability of the Fed's lower bound hitting 0.25% or below before end-2026, implying the market expects rates to remain elevated or decline only modestly from current levels. The astronomical 2688.8% implied yield on the "Yes" side reflects the severe mispricing typical of low-probability tail events, though the zero 24-hour volume and $11k open interest suggest minimal liquidity and conviction behind either side. With 258 days to expiry and a neutral regime score, this appears to be a speculative position rather than an actively traded market, making the extreme yield figures less reliable as true probability estimates.

Resolution rules

The FED interest rates are defined in this market by the lower or the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings. This market will resolve to “Yes” if the lower or the upper bound of the target federal funds rate reaches the specified level at any point by December 31, 2026, 12:59 PM ET. Otherwise, this market will resolve to “No.” Emergency rate cuts and hikes outside the regularly scheduled meetings will be considered. The resolution source for this market is the official website of the Federal Reserve at: https://www.federalreserve.gov/monetarypolicy/openmarket.htm. This market may resolve as soon as the relevant data showing the reached level is published.

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