Fed Holds Steady as Markets Price Status Quo Into July Meeting
Traders are overwhelmingly pricing a 79¢ probability of a 0bps hike at the July 2026 FOMC meeting. The 25bps hike scenario sits at just 19¢, while rate cuts remain off the table with a 77¢ chance of zero cuts by year-end. This reflects a market that trusts the Fed's 'higher for longer' narrative despite slowing growth indicators.
Key takeaways
- 01
Traders are overwhelmingly pricing a 79¢ probability of a 0bps hike at the July 2026 FOMC meeting.
- 02
The 25bps hike scenario sits at just 19¢, while rate cuts remain off the table with a 77¢ chance of zero cuts by year-end.
- 03
This reflects a market that trusts the Fed's 'higher for longer' narrative despite slowing growth indicators.
Full analysis
The Federal Reserve decision markets for July 2026 show remarkable consensus: a 79¢ price on a 0bps hike, with the 25bps hike alternative at 19¢ (volume $289k). The broader rate path is equally telling — the 'Fed cut rates 0 times by December 2026' contract trades at 77¢ with $47k volume, the strongest signal that markets expect no monetary easing this year. The core CPI inflation print for June at >2.6% (76¢) and >3.7% headline CPI (73¢) reinforce the narrative that the Fed remains data-dependent and patient. Key contracts to watch: KXFEDDECISION-26JUL- (0bps hike, 79¢, $523k vol) and KXRATECUTCOUNT-26DEC (0 cuts, 77¢, $47k vol). Any deviation in next week's CPI release could trigger sharp repricing in these binaries.
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