Will SOFR be above 4.25 by end of Q4 2026

30-day trend

Analysis

This probability represents a 91% chance that the Secured Overnight Financing Rate (SOFR) will remain above 3.00% through the end of December 2026. The market is pricing in a high likelihood of rates staying elevated, reflecting expectations that the Federal Reserve will maintain restrictive policy longer than historical norms suggest or cut only modestly from current levels. The main driver is inflation persistence—if price pressures remain stubborn, rate cuts will be delayed or smaller; conversely, recession concerns or rapid disinflation would increase the probability of deeper cuts below 3.00%. The Federal Reserve's interest rate decisions at each scheduled meeting through December represent the primary catalyst, with monthly inflation data (CPI/PCE releases) and employment reports directly influencing Fed guidance. Market expectations will shift most sharply around major economic data releases and FOMC communications that signal rate-path shifts.

• ›Current SOFR levels and recent Fed action establish the baseline; SOFR would need to fall roughly 150–175 basis points from typical 2026 levels to break below 3.00% by year-end
• ›Inflation trajectory through Q4 2026—particularly PCE and core CPI—will determine whether the Fed maintains, pauses, or cuts rates; disinflation would increase the probability SOFR falls below 3.00%
• ›Labor market strength and unemployment trends; persistent job growth typically supports higher rates, while a sharp rise in unemployment would pressure SOFR downward
• ›Futures market pricing for Fed funds rates at end-2026 currently implies SOFR remaining in the 3.00–3.75% range under consensus scenarios
• ›Geopolitical shocks, credit events, or financial instability could force emergency rate cuts that would dramatically increase the odds SOFR falls below 3.00%

What moved the line

• Aug 20Above 3.50%↓29pp83→54¢ · Kalshi
• Aug 18Above 3.50%↑21pp63→84¢ · Kalshi
• Aug 20Above 3.25%↓18pp63→45¢ · Kalshi
• Aug 18Above 3.75%↑17pp41→58¢ · Kalshi
• Aug 20Above 3.25%↓15pp87→72¢ · Kalshi

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How we compute these odds