Will the Fed cut rates more than 25 bps in 2026?
Prediction markets currently give a 18% probability that Will the Fed cut rates more than 25 bps in 2026?. This contract trades at 18¢ on Kalshi, closing January 1, 2027. The 11-cent cross-venue gap (16¢ on Kalshi vs 27¢ on Polymarket) suggests significant arbitrage opportunity, with Kalshi pricing substantially lower odds of multi-cut rate scenarios despite 260 days to expiry.
Analysis
The 11-cent cross-venue gap (16¢ on Kalshi vs 27¢ on Polymarket) suggests significant arbitrage opportunity, with Kalshi pricing substantially lower odds of multi-cut rate scenarios despite 260 days to expiry. The extreme 738% implied yield on Yes contracts combined with modest $6,129 daily volume and $105k open interest indicates thin liquidity that may be amplifying the price disconnect. Realized volatility of 670% and a 2.56 vol ratio signal this market is pricing considerable uncertainty around Fed policy, though the neutral regime and flat 7-day price action suggest current positioning may be stabilizing around these depressed odds.
Resolution rules
If the Federal Reserve cuts rates by more than 25 basis points before Dec 31, 2026, then the market resolves to Yes.
Indicators
Regime
Trade
sf trade KXLARGECUT-26 yes 100