Will 4 Fed rate cuts happen in 2026?

The 4% probability for four Fed rate cuts in 2026 reflects extremely dovish pricing, with a staggering 3,396% implied yield on the Yes side despite solid $8.4M in 24-hour volume and $81.6M open interest. The zero spread and flat 7-day price action suggest this extreme tail scenario has found an equilibrium, though the 24 Cliff Risk Index warrants caution around potential sharp repricing if economic conditions shift materially. With 258 days to expiry, this market is pricing in a scenario requiring aggressive easing that current Fed guidance makes highly unlikely, creating potential value asymmetry for contrarian traders.

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.

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