Fed Rate Path Remains Hawkish; Hike Odds Near 50%
The market is pricing a 52% chance of a 25bp hike at the September 2026 FOMC meeting, while a cut is virtually off the table at 2¢. Bond yields are steady, but the debate over the terminal rate continues to dominate macro trading.
Key takeaways
- 01
The market is pricing a 52% chance of a 25bp hike at the September 2026 FOMC meeting, while a cut is virtually off the table at 2¢.
- 02
Bond yields are steady, but the debate over the terminal rate continues to dominate macro trading.
- 03
The Federal Reserve decision markets on Kalshi show a clear hawkish tilt.
Full analysis
The Federal Reserve decision markets on Kalshi show a clear hawkish tilt. The contract 'Will the Federal Reserve Hike rates by 25bps at their September 2026 meeting?' trades at 52¢ with over 76,000 volume, making it the most liquid Fed contract. Meanwhile, the probability of a cut at the same meeting is just 2¢ (volume 94,669). This divergence suggests traders expect the Fed to remain restrictive despite cooling inflation. The 'no change' outcome is priced at 44¢, indicating that a hold is still the modal expectation but a hike is a serious tail risk. The broader rate‑sensitive markets (SPY +1.37%, QQQ +3.32%) rallied today, which could be partially driven by the fixed‑income calm. Key contracts to watch: KXFEDDECISION-26SEP- for the September meeting, and KXRATECUTCOUNT-26DEC for the total number of cuts in 2026 (currently pricing 0 cuts at 85¢). Traders should monitor the RFFR (risk‑free rate forecast) and any Fedspeak for shifts in these probabilities.
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sf book KXFEDDECISION-26SEP-