Will the upper bound of the target federal funds rate be 3.25% at the end of 2026?

The market is pricing in only an 11% probability that the fed funds rate upper bound stays at 3.25% through end-2026, down from 13¢ a week ago, suggesting traders increasingly expect either rate cuts or hikes from current levels. The extremely asymmetric implied yields (1,251% for Yes vs. 19.1% for No) and thin 24-hour volume of just $200 indicate low liquidity and potentially unreliable pricing, though the tight 1¢ spread suggests some market-maker presence. With 236 days to expiry and a moderate Cliff Risk Index of 8, this contract faces meaningful uncertainty around FOMC decisions, though the neutral regime score suggests no extreme tail-risk pricing at present.

Resolution rules

The FED rate is defined in this market by 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 according to the upper bound of the Federal Reserve’s target federal funds range after the December 2026 Federal Open Market Committee (FOMC) meeting, currently scheduled for December 8-9, 2026. This market may resolve immediately after the statement for the FOMC’s December meeting, with relevant information about the FOMC’s decision on the target federal funds range, has been issued. If no FOMC decision on the target federal funds range for their December meeting has been issued by December 31, 2026, 11:59 PM ET, this market will resolve according to the upper bound of the target federal funds range at that time. The upper bound of the target federal funds range will be rounded to the nearest 25 basis points for resolution of this market. If the upper bound of the target federal funds range falls exactly between two listed options, it will be rounded away from zero (e.g. if the upper bound is 2.875, with listed options of 3.0 & 2.75, this market will resolve to 3.0). The primary resolution source for this market will be official information from the Federal Reserve (https://www.federalreserve.gov/monetarypolicy/openmarket.htm).

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