Will the upper bound of the federal funds rate be above 2.75% following the Fed's Jul 29, 2026 meeting

The yield curve displays a dramatic steepening pattern, with the shortest tenor (42 days to July 26) pricing substantially higher probabilities than longer tenors. At the 42-day mark, YES probabilities for lower strike prices cluster at 99% and 98% (T2.75-T3.25), while the 91-day September contracts show meaningful compression to 93%, 89%, and 86% for equivalent strikes. This compression continues through the October contracts at 133 days (88%, 85%, 75%) and December contracts at 176 days (88%, 82%, 80%), before flattening considerably at the 225-day January expiration where probabilities stabilize in the 70-85% range for lower strikes. The cheapest YES probability across the entire curve appears in the January bucket, where T3.25 trades at just 55% and T3.75 at 28%, representing a stark departure from the near-term concentration of probability mass. The market's current pricing suggests strong conviction that if the event occurs, it will happen in the very near term—within the next six weeks—with probabilities declining materially as time extends. The steep downward slope from July to September indicates the market expects resolution or significant clarification well before the autumn months. However, the flattening and eventual repricing lower at the January expiration suggests the market acknowledges meaningful tail risk of either non-occurrence or a substantially different outcome by year-end. The concentration of 99% probabilities at the shortest tenor combined with the dramatic drop-off thereafter reveals a market pricing in near-term certainty while maintaining substantial uncertainty about medium-term outcomes.