Fed expected to hold rates steady in July, CPI data in focus
The Fed July meeting is approaching, with markets pricing a 93% probability of no rate change. The 25bps hike contract is at 5¢, reflecting low odds. CPI data will be key to watch.
Key takeaways
- 01
The Fed July meeting is approaching, with markets pricing a 93% probability of no rate change.
- 02
The 25bps hike contract is at 5¢, reflecting low odds.
- 03
CPI data will be key to watch.
Full analysis
The Federal Reserve decision markets are buzzing with activity as the July 2026 meeting approaches. The largest market, KXFEDDECISION-26JUL- with ticker 'Will the Federal Reserve Hike rates by 0bps at their July 2026 meeting?', is trading at 93¢ on Kalshi with a volume of 176,621 and a tight spread of 1¢, indicating a strong consensus for no rate change. Meanwhile, the market for a 25bps hike (KXFEDDECISION-26JUL-22) sits at just 5¢ with 324,177 volume, reflecting low probability. The upper bound of the federal funds rate is priced at 99¢ for staying above 3.50% (KXFED-26JUL-T3.50) with 191,151 volume. Traders should watch the live CPI data, with inflation expectations showing a 31% chance of CPI being above 3.4% (KXCPIYOY-26JUL-T3.4). The Fed's decision will also impact broader markets, with the S&P 500 (SPY) down 0.19% and the VIX falling 1.66%. For traders, the key is to monitor how rate expectations shift ahead of the July 29–30 meeting. The consensus is dovish, but any surprise in inflation data could cause sharp moves in these contracts.
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