Fed rate cut by December 2026 meeting?

The market is pricing a 60% probability of at least one Fed rate cut by December 2026, but the extraordinarily high implied yield on the "No" side (898.2%) suggests significant tail risk pricing for a hold scenario, indicating traders expect either a cut or substantial volatility rather than stable rates. With 61 days to expiry and only $375k in 24-hour volume against $47.2M open interest, liquidity is relatively thin for the position size, creating potential slippage risk on larger trades. The modest 3-point price decline over seven days (63¢ to 60¢) and tight 2¢ spread indicate the market has stabilized around current consensus, though the neutral regime score suggests no strong directional conviction.

Resolution rules

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 December 2026, currently scheduled for December 8-9. Otherwise, this market will resolve to “No”. If no December meeting takes place by January 7, 2027, 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.

Indicators

Regime

Trade