Fed Rate Decision Heats Up: 56¢ Probability for a September Hike

The Federal Reserve is the single most actively traded macro topic today, with the September 2026 meeting dominating the prediction market landscape. The key contract, KXFEDDECISION-26SEP- with a title 'Will the Federal Reserve Hike rates by 25bps at their September 2026 meeting?', is priced at 56¢ on a volume of 540,268 contracts. This reflects a market-implied probability of roughly 56% for a modest quarter-point hike. Simultaneously, the 'Hike by 0bps' contract (KXFEDDECISION-26SEP- at 41¢) has seen an enormous 1,207,549 contracts trade, representing the view that the Fed will hold steady. The long-tail scenarios—larger cuts or hikes—remain deeply out-of-the-money, with 'Cut by 25bps' at just 1¢ and 'Hike by >25bps' at 1¢. Traders should also monitor the KXFED-26SEP-T3.75 market, which asks whether the upper bound of the fed funds rate will be above 3.75% following the meeting. At 58¢, it suggests the market leans toward a terminal rate slightly above current levels, consistent with a 25bp hike. The sheer volume and tight 1¢ spreads on these contracts make them highly liquid instruments for expressing a view on the immediate future of US monetary policy ahead of the next CPI or payroll print.