Will the upper bound of the federal funds rate be above 2.75% following the Fed's Dec 9, 2026 meeting

The yield curve displays a dramatic steepening structure with a sharp cliff around the 4.00 strike level. At the December 26 tenor (82 days), YES probabilities remain elevated through 3.75 (98.0%), then collapse from 83.0% at T4.00 to just 32.0% at T4.25 and 1.0% at T4.50 and beyond. The January 27 tenor (131 days) shows a similar but more gradual decline, with probabilities holding at 88-91% through T3.50, dropping to 69.0% at T4.00, then falling to 28.0% at T4.25 and 1.0% thereafter. By March 27 (179 days), the curve becomes notably erratic, with probabilities scattered across the 2.50-4.25 range (61% down to 29%), suggesting substantial uncertainty or illiquidity at longer tenors. The cheapest YES probabilities appear at strikes T4.50 and above across all tenors, consistently priced at 1.0-2.0%. The market is currently pricing in a highly concentrated outcome expectation centered between 3.75 and 4.00 basis points, with conviction strongest at the nearest December tenor. The steep cliff structure indicates the market views outcomes below 4.00 as highly probable in the near term, while outcomes at or above 4.25 are treated as tail risks. The progressive flattening and fragmentation moving from December to March suggests either declining conviction over longer horizons or reduced trading activity at distant tenors. Overall, the curve communicates that market participants expect the event outcome to resolve decisively within a narrow band, with minimal probability mass assigned to extreme