Will the Fed’s lower bound reach 0.75% or lower before 2027?

This market is pricing in an extremely low probability (8%) for the Fed's lower bound hitting 0.75% or below by end-2026, implying the market expects rates to remain elevated or decline only modestly from current levels. The 11¢ spread and zero 24-hour volume suggest severe illiquidity despite $9K open interest, making the 1,627% implied yield on the "Yes" side potentially misleading—this extreme yield reflects the wide bid-ask gap rather than genuine arbitrage opportunity. With 258 days to expiration and a realized volatility of 776%, the market is pricing in substantial uncertainty, yet the neutral regime score and flat 7-day price action (9¢ to 8¢) suggest limited recent conviction in either direction.

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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