Current Market Outlook

Prediction markets are pricing in near certainty that Federal Reserve Chair Jerome Powell will use the word "expectation" during his January 28, 2026, post-FOMC press conference. The leading market, "Will Powell say Expectation at his Jan 2026 press conference?" is trading at 97% on Polymarket, indicating the market views this outcome as virtually assured. On Kalshi, the same contract trades at approximately 92%, creating a notable 5.3% spread. A 97% probability suggests traders see the inclusion of this specific term as a core component of the Fed's standard communication toolkit, making its omission a significant surprise.

Key Factors Driving the Odds

The high probability is driven by the term's foundational role in Federal Reserve forward guidance. "Expectation" is a staple in the Chair's remarks when discussing the economic outlook, inflation projections, or the likely path of monetary policy. Historical analysis of recent FOMC transcripts shows Powell used a form of the word "expect" over a dozen times in his December 2025 press conference alone, typically in phrases like "our expectation is that inflation will continue to moderate." Secondly, with the January meeting being the first of the year, markets anticipate Powell will explicitly outline the Federal Open Market Committee's expectations for the annual economic and policy trajectory, making the term's usage almost mechanically certain.

What Could Change These Odds

The primary risk to the current near certain pricing is an extraordinary shift in communication strategy. If the Fed were to adopt unexpectedly terse, direct language due to a major financial crisis or a sharp, unforeseen economic turn, Powell might deviate from his detailed, expectation setting remarks. However, given the institutional nature of these communications, such a shift is considered highly improbable. The 5% differential between platforms may narrow as the event approaches, but it primarily reflects platform specific liquidity and trader base differences rather than a fundamental disagreement on the outcome.

Cross-Platform Analysis

A clear arbitrage opportunity exists, with Polymarket pricing the event at 97% and Kalshi at roughly 92%. This 5.3% spread is meaningful for high volume traders. The discrepancy likely stems from differing participant pools and liquidity concentrations. Polymarket's higher price may reflect a global crypto native audience with strong consensus, while Kalshi's U.S. regulated platform might attract traders who are slightly more cautious in assigning absolute certainty to specific word choice, despite the overwhelming historical precedent. This spread is expected to converge as resolution nears, with arbitrageurs selling the Polymarket "Yes" shares and buying the Kalshi equivalent.