Fed emergency rate cut before 2027?
Prediction markets currently give a 12% probability that Fed emergency rate cut before 2027?. This contract trades at 12¢ on Polymarket, closing December 31, 2026. This market has collapsed dramatically from 17¢ to 7¢ over seven days, reflecting diminished recession fears and confidence in the Fed's baseline policy path, yet the 1,880% implied yield on the "Yes" side suggests meaningful tail-risk pricing for a genuine financial crisis scenario.
Analysis
This market has collapsed dramatically from 17¢ to 7¢ over seven days, reflecting diminished recession fears and confidence in the Fed's baseline policy path, yet the 1,880% implied yield on the "Yes" side suggests meaningful tail-risk pricing for a genuine financial crisis scenario. With only $200 in daily volume against $24k open interest and a tight 1¢ spread, liquidity is thin relative to position size, creating potential slippage for larger traders seeking to exit. The 13 cliff risk index warrants attention given the binary nature of emergency cuts—any sudden economic deterioration in the next 258 days could rapidly reprrice this contract upward.
Also on kalshi at 17¢(Δ -5¢)
Resolution rules
This market will resolve to "Yes" if the Federal Open Market Committee (FOMC) holds an emergency meeting after which the upper bound of the target federal funds rate is lowered between November 11, 2025 and December 31, 2026, 11:59 PM ET. Otherwise, this market will resolve to "No". An emergency meeting is defined as any unscheduled meeting called by the Federal Reserve Board or the Federal Open Market Committee (FOMC) apart from the regular eight pre-scheduled meetings for 2025 and the regular eight pre-scheduled meetings for 2026. The resolution source will be official announcements from the Federal Reserve’s website (federalreserve.gov) or credible news sources reporting on the emergency meeting.
Indicators
Regime
Edges (1)
Trade
sf trade 0x93a3b80b1fb485057add882b55d12011ea011fedd9abededad86ac6cb53a2802 yes 100