Will the Federal Reserve Cut rates by 25bps at their June 2026 meeting

The yield curve for KXFEDDECISION exhibits a pronounced inverted structure, with the shortest-tenor bucket (43 days) pricing the baseline outcome H0 at 94%, while progressively longer tenors show substantial compression. The 85-day tenor maintains H0 at 90%, but by 134 days H0 drops to 74%, and this deterioration accelerates further into the curve: 76% at 176 days, 77% at 219 days, then collapsing to 69% at 268 days and continuing to decline through 54% (316 days), 60% (358 days), and eventually stabilizing around 24-36% beyond 400 days. The cheapest YES probability for the baseline outcome occurs in the longest-dated contracts (540 days), where H0 trades at just 24%. This inversion is dramatic and systematic, indicating a clear market consensus that the baseline scenario becomes increasingly unlikely as the time horizon extends. The curve's shape communicates that markets expect the event to resolve away from the baseline in the medium to long term. The near-term confidence in H0 (94% at 43 days) reflects either an imminent decision or strong conviction about the immediate outcome, while the steady erosion across subsequent tenors suggests markets anticipate material probability mass shifting to alternative outcomes—particularly C25 (rate cuts), which rises from 4% at 43 days to 22% at 134 days and stabilizes around 8-22% thereafter. This pattern indicates the market is pricing in a scenario where the baseline holds in the very near term but faces structural headwinds, with traders increasingly hedging against longer-duration alternatives. The liquidity concentration in the front end (43-day contracts show