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Will the Federal Reserve raise interest rates in 2026?

Resolution: Updated:
66%

market consensus

chance the market gives this event โ€” not your chance of being right

Yes โ€” The event happens
66%
No โ€” The event does not happen
34%
Venue range
66% โ€” 66%

Trade this contract

Open on Binance WalletYes 0.66
  • No external wallet needed
  • gas covered
  • yield on collateral
Buy the opposite sideNo 0.34

In short

The market leans toward a rate increase happening before the year is out, but it is far from settled โ€” this trades as a likely-but-contestable outcome rather than a done deal. The reason is asymmetry: a hike requires the Federal Open Market Committee to actively reverse course on inflation grounds within a handful of remaining 2026 decisions, and the price has been sliding as that window narrows. Firm inflation prints or explicit hawkish guidance would push it toward certainty; a soft labour market or a committee that simply holds through December would collapse it.

How the contract works

A contract on this outcome settles at $1 if the Fed's target range upper bound is raised within the window, and at nothing if it is not. The price is simply what buyers and sellers currently agree the chance is, expressed as cents on the dollar: a contract trading at 0.30, for example, would mean the market thinks the event happens about three times in ten. Settlement is tied to the conclusion of the December 2026 FOMC meeting on 8โ€“9 December, with the outcome read off the Federal Reserve's published open market operations record; a No result cannot be confirmed until that December decision is out. A position does not have to be held to settlement โ€” it can usually be sold beforehand at whatever the price is at that moment, which is how holders take a view on the news flow rather than on the final answer.
What the market thinks happens
$100
Yes66%

The event happens

Costs now
$0.66
If you put in $100
$152
No34%

The event does not happen

Costs now
$0.34
If you put in $100
$294

Probability

0%25%50%75%100%12:2617:5723:2905:0010:3116:02
ConsensusPredict.funPolymarketBinance Wallet

How the price has moved

The recorded history is short but directional. The market's first observation, on 29 July 2026, put the probability at 76%, and across 187 price points it has traded between 63% and 78% โ€” a 15-point band, with the current consensus of 63% sitting exactly at the bottom. The high never exceeded 78%, so this contract has never traded as close to settled. The decline follows no single publicly reported trigger that can be identified from the price record alone; it is consistent with the ordinary decay that affects any contract requiring an action by a fixed date, where each passing meeting removes a route to Yes. Venue agreement has been tight throughout โ€” 63% at both Predict.fun and Polymarket, 65% at Binance Wallet, a spread of 2.4 percentage points โ€” which suggests the drift reflects a shared reading of the macro data rather than fragmented positioning.

Context

The question is deliberately simple: at any point between 1 January 2026 and the end of the Federal Open Market Committee's final meeting of the year, does the upper bound of the federal funds target range go up. Not the direction of the Fed's rhetoric, not the dot plot, not market expectations โ€” the published target range itself. The FOMC sets that range at eight scheduled meetings a year, and can in principle act between meetings if conditions demand it. The final scheduled decision of 2026 lands on 8โ€“9 December, which is why this market cannot resolve No before that meeting concludes. Everything hinges on the decisions still on the calendar in the autumn and early winter. That the contract trades well below certainty in late July is itself informative: it tells you the market does not consider the question already answered, and therefore that no increase to the upper bound has been recorded so far this year. The whole probability rests on the remaining meetings, and on a committee that would have to be persuaded that inflation risk now outweighs whatever it has been weighing more heavily.

Analysis

The consensus across venues sits at 63%, which in plain terms means the market thinks a 2026 hike is more likely than not but views roughly one path in three as ending with the range unchanged. That is a genuinely uncertain price. It is not the profile of a market waiting on a formality; it is the profile of a market handicapping a live policy decision with a small number of scheduled opportunities left. The direction of travel matters more than the level. The recorded price history for this market begins on 29 July 2026 at 76%, and across 187 observations it has ranged between 63% and 78%. It now sits at the bottom of that range. A 13-point decline from the opening level, with the high never exceeding 78%, describes a market that started out fairly confident a hike was coming and has been steadily talked down. Time itself is part of that: every meeting that passes without an increase removes one of the remaining chances and shifts weight toward No, so a flat news environment mechanically drags this probability lower. The agreement between venues is worth noting. Predict.fun and Polymarket both print 63%, Binance Wallet 65%, and the total spread between highest and lowest is 2.4 percentage points. On a question where different platforms could in principle read the Fed's published record differently, a spread that narrow says the settlement criterion is treated as unambiguous โ€” the upper bound of the target range is a single published number, not a matter of interpretation. Total volume of $11,064,534, split almost evenly between the two largest venues at $5,889,205 and $5,159,005, indicates a market with enough participation that the price is not one participant's opinion. On the substance, the case for a hike has to clear a high bar. Central banks are institutionally reluctant to reverse direction quickly, because doing so concedes that the previous stance was wrong and unsettles the term structure of interest rates the Fed has spent months guiding. For the upper bound to rise, the committee would need inflation data persuasive enough that a majority accepts the cost of that reversal โ€” and it would need to happen in the compressed autumn calendar rather than being deferred into 2027. The market's 63% is best read as a judgement that the inflation risk is real and visible, but the institutional inertia is also real. One structural feature keeps the probability from falling faster: the settlement rule is generous to Yes. Any increase to the upper bound at any point in the window counts, including an intermeeting move, and a sequence of cuts followed by a single hike still resolves Yes. The contract does not require a sustained tightening cycle. It requires one upward click on one date. That is why the price can sit in the sixties even while a hold is the single most likely outcome at any individual meeting.

What moves the probability

  • Inflation prints between now and December

    The single largest input. Consecutive monthly readings showing price pressure re-accelerating would give the hawkish side of the committee a mandate and could move this contract by double digits in days. Readings that show inflation drifting back toward target do the opposite, and would likely take the probability below the 63% floor of its recorded range.

  • The shrinking meeting calendar

    Only a small number of scheduled decisions remain before the 8โ€“9 December meeting concludes the window. Each one that passes with the range unchanged is a permanent reduction in the paths to Yes, which pushes the probability down passively even with no news. This is the most reliable force in the market and it works in one direction only.

  • Labour market data

    A softening jobs market removes the political and economic room for a hike and strengthens the argument for holding or easing. Strong employment alongside firm prices is the combination that most supports Yes. This driver matters roughly as much as inflation because the Fed's mandate weighs both.

  • Committee composition and guidance

    FOMC voting rotates each January, and the chair's four-year term as chair expired in May 2026, so the balance of views inside the room has been a live question this year. Explicit signalling in a statement or press conference that the committee is prepared to tighten would move the price sharply toward Yes; language reaffirming patience does the reverse.

  • The generous Yes trigger

    Settlement needs only one increase to the upper bound at any point in the window, including between meetings. That keeps a floor under the probability, because low-likelihood shock scenarios โ€” an inflation surprise, a disorderly dollar move โ€” all resolve Yes without requiring a full tightening cycle. It explains why the contract has never traded near zero.

  • Financial conditions and the dollar

    If long-term Treasury yields and the dollar tighten conditions on their own, the Fed has less need to act, which favours No. A weakening dollar accompanied by rising import costs works the other way. This is a secondary driver but it shapes how the committee reads the inflation data.

The case for

  • Inflation data over the autumn shows price pressure firming rather than fading, giving a majority of the committee grounds to accept the cost of reversing direction before year-end.
  • The settlement rule requires only a single increase to the upper bound at any point in the window, so one hawkish decision at any remaining meeting โ€” or an intermeeting move โ€” is enough, with no sustained cycle required.
  • The market has never priced this below 63% in its recorded history, which means participants have consistently seen a credible path to a hike even at the low end of sentiment.
  • A labour market that stays firm removes the strongest argument for holding and lets the committee treat inflation as the binding constraint.

The case against

  • Central banks reverse direction slowly, and a hike within months of a different stance would force the committee to concede its prior guidance was wrong โ€” a cost the FOMC has historically preferred to defer.
  • Only a small number of scheduled decisions remain before the window closes on 9 December, so the outcome requires action on a specific near date rather than eventually.
  • The probability has fallen from 76% at first record to the bottom of its 63%โ€“78% range, meaning the flow of information so far this year has been read as favouring a hold.
  • Any softening in employment data would shift the committee's balance of risks toward the labour side of its mandate and effectively remove a hike from the table for 2026.

Trade this contract

Venues (3)

Open on Binance WalletYes 0.66
  • No external wallet needed
  • gas covered
  • yield on collateral

Venues (3)

Resolution rules

Determined by
Federal Reserve open market operations page (federalreserve.gov/monetarypolicy/openmarket.htm), with credible reporting as backup
Resolution date
Venues settle by different sources
Predict.fun: PREDICT_DOT_FUN
Binance Wallet: Fed rate hike in 2026?

The market resolves Yes if the upper bound of the federal funds target range is increased at any point between 1 January 2026 and the conclusion of the Federal Open Market Committee's December 2026 meeting, scheduled for 8โ€“9 December 2026. Otherwise it resolves No. The primary source is the Federal Reserve's open market operations page at federalreserve.gov/monetarypolicy/openmarket.htm, with credible news reporting used as backup if the page is delayed. Because a hike at the final meeting would still count, a No resolution is not final until the December decision is published โ€” the stated resolution date is 9 December 2026. Predict.fun settles under its own published criteria and Binance Wallet lists the market under its own wording; both reference the same underlying published figure, which is why the price spread between venues has stayed narrow.

Calculation methodology โ†’

Local context

A US rate increase does not stay in the United States. For American households it resets mortgage quotes, credit-card rates and the yield on Treasury bills within weeks. For everyone else, the transmission runs through the dollar and the long end of the Treasury curve: a hike typically lifts the dollar, and a stronger dollar raises the cost of dollar-denominated imports and debt everywhere from Mumbai to Jakarta, while pressuring the pound, the euro, the Canadian dollar and the Australian dollar. The second channel is other central banks. The Bank of England, the Bank of Canada, the Reserve Bank of Australia and the Reserve Bank of India all set policy with one eye on the Fed, because too wide a rate gap pressures their currencies and imports inflation. A Fed that tightens narrows their room to ease, which shows up in domestic mortgage and business lending rates. The third is equities: higher US policy rates raise the discount rate applied to future earnings, which weighs hardest on long-duration technology valuations and, by extension, on index funds and pension holdings that are heavily exposed to US large caps.

What to watch

The scheduled FOMC decisions remaining in the autumn are the only dates on which Yes can be triggered by ordinary means, and the 8โ€“9 December meeting is both the last of them and the settlement event. Between now and then, monthly US consumer price and personal consumption expenditure inflation releases and the monthly employment report are the data points most likely to move the price; each arrives roughly once a month and each has repeatedly repriced this kind of contract in the past. Watch the statement language and the post-meeting press conference for any shift from patience to explicit readiness to tighten, and watch the quarterly Summary of Economic Projections for whether committee members' own rate paths turn upward. Between meetings, a large upside inflation surprise or a disorderly move in the dollar are the routes to an unscheduled action.

Common questions

What exactly settles this market, and when?
It settles on whether the upper bound of the federal funds target range is increased at any point between 1 January 2026 and the conclusion of the FOMC's December 2026 meeting, scheduled for 8โ€“9 December. The determining source is the Federal Reserve's own open market operations page, with credible reporting as backup. A No outcome cannot be confirmed until the December decision is published, which is why the resolution date is 9 December 2026.
What does the current price actually mean?
The price is the market's estimate of the chance the event happens, expressed in cents on the dollar. A contract at 0.63 means participants collectively see roughly a 63-in-100 chance. It settles at $1 if the range is raised and at nothing if it is not, so the price is also what someone pays now for that $1 claim.
Does a rate cut in 2026 rule out a Yes?
No. The rule triggers on any increase to the upper bound within the window, regardless of what came before. A series of cuts followed by a single hike in, say, October or December would still resolve Yes. The contract is about one upward move occurring, not about the net direction of policy over the year.
What if the Fed acts between scheduled meetings?
An intermeeting increase counts. The settlement language covers any point in the window, not only scheduled decisions, so an emergency or unscheduled move to the upper bound would resolve the market Yes. This is part of why the probability has never traded near zero.
Why do the venues show slightly different numbers?
Predict.fun and Polymarket both print 63% and Binance Wallet 65%, a total spread of 2.4 percentage points. Small gaps like that reflect different pools of participants and differing liquidity rather than disagreement about the rules โ€” the upper bound of the target range is a single published figure. Binance Wallet's volume of $16,324 is tiny next to the millions traded on the two larger venues, so its price moves on less activity.
Why would the Fed hike at all rather than hold?
The trigger would be inflation that stops falling or turns back up while the labour market stays firm, leaving the committee unable to justify current policy as restrictive enough. The counterweight is institutional: reversing direction quickly concedes the previous stance was misjudged and disrupts guidance the Fed has already given markets. The market's price in the sixties is essentially a judgement on which of those two forces wins before December.

Related events

66%/ 34%
Yes / No
Open on Binance Wallet