$17.59M
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$17.59M
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5
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On Jan 28, 2026 If the Federal Reserve does a Hike of X on January 28, 2026, then the market resolves to Yes. This market is mutually exclusive. Therefore, if the Federal Reserve hikes by 50bps, the 50bps market will resolve to Yes and the 25bps market will resolve to No. Only one bucket, at maximum, can resolve to Yes. Note 4/28/25: For the markets beginning after the May meeting, if a scheduled FOMC meeting is canceled and does not occur on its scheduled date, then the strike for "Fed maintai
Prediction markets are expressing near-certainty that the Federal Reserve will hold interest rates steady at its January 2026 meeting. The market for a 0 basis point (bps) hike, meaning no change to the federal funds rate, is trading at approximately 96 cents, implying a 96% probability. This overwhelming confidence suggests traders view a pause as virtually assured, with only a 4% combined chance priced in for any rate hike action.
Two primary macroeconomic factors are cementing this outlook. First, the Federal Reserve's own projected policy path, as outlined in its latest Summary of Economic Projections, points toward a prolonged hold after an expected cutting cycle through 2025. Markets are pricing in this forward guidance, anticipating that by early 2026, the Fed will be in a stable "maintenance" phase. Second, consensus economic forecasts suggest inflation will have sustainably returned to the Fed's 2% target by that time, removing the primary catalyst for further tightening. The current high-liquidity volume of $17.0 million indicates this view is held with strong conviction by institutional and sophisticated participants.
The dominant risk to this consensus is a resurgence of inflation in late 2025 that forces the Fed to reconsider its policy stance. Should core PCE inflation fail to decelerate as projected, or if a supply shock triggers new price pressures, the probability of a hike would increase substantially. Key data releases in the fourth quarter of 2025, including employment cost indices and CPI reports, will be critical watchpoints. A second, less likely scenario would be an unexpectedly robust economic boom, prompting the Fed to hike preemptively. The market's current low probability for a hike indicates it sees these scenarios as outliers.
AI-generated analysis based on market data. Not financial advice.
This prediction market topic concerns the potential monetary policy decision of the Federal Open Market Committee (FOMC) on January 28, 2026. Specifically, it asks whether the Federal Reserve will increase its benchmark interest rate, known as the federal funds rate, at that meeting. The market is structured with mutually exclusive outcomes for different hike magnitudes, such as 25 basis points (0.25%) or 50 basis points (0.50%). Only one outcome can resolve affirmatively, reflecting the singular decision made by the FOMC. The resolution is contingent on the official policy action announced at the conclusion of the scheduled two-day meeting. The topic sits at the intersection of macroeconomic forecasting, central bank policy, and financial market speculation. Interest stems from the profound influence of Fed policy on everything from mortgage rates and business investment to currency valuations and stock market performance. Market participants analyze a wide array of economic indicators, including inflation data, employment reports, and GDP growth, to gauge the Fed's likely path. The January 2026 meeting is particularly significant as it represents one of the first policy decisions of a new year, setting the tone for monetary conditions and offering insight into the Fed's assessment of the economic landscape for the remainder of 2026. The prediction market serves as a collective intelligence mechanism, aggregating diverse views on this critical economic event.
The Federal Reserve's interest rate decisions are made within a historical context defined by major economic cycles. The period leading into 2026 is shaped most directly by the post-pandemic inflation surge of 2021-2023. In response to inflation reaching a 40-year high of 9.1% in June 2022, the Fed embarked on its most aggressive tightening cycle in decades, raising the federal funds rate from near zero in March 2022 to a target range of 5.25%-5.50% by July 2023. This cycle included four consecutive 75-basis-point hikes, a pace not seen since the early 1980s under Chair Paul Volcker. Historically, the Fed has often paused or pivoted to cutting rates after such aggressive tightening to avoid precipitating a recession, as seen in cycles following 2000 and 2007. The January meeting date itself has precedent. For example, on January 30, 2019, under Chair Powell, the FOMC signaled a major policy pivot by removing language about "further gradual increases" after having raised rates in December 2018. This highlights how early-year meetings can be pivotal for communicating shifts in the policy trajectory based on accumulated economic data from the prior year.
The Federal Reserve's interest rate decision in January 2026 carries significant weight for the global economy. A decision to hike rates would signal the Fed's ongoing concern about inflationary pressures or an overheating economy, likely leading to higher borrowing costs for consumers and businesses. This would increase mortgage rates, auto loan rates, and credit card APRs, potentially cooling consumer spending and business investment. Conversely, a decision to hold or cut rates would signal confidence that inflation is sustainably returning to the 2% target, providing relief to borrowers and supporting economic activity. The decision also has profound implications for financial markets. Equity markets often react negatively to unexpected hikes, which can dampen corporate earnings forecasts and increase discount rates for future cash flows. The U.S. dollar's value against other currencies is also heavily influenced by interest rate differentials, affecting international trade and emerging market economies. Furthermore, the Fed's action sets a tone for other central banks worldwide, influencing global capital flows and economic stability.
As of mid-2024, the Federal Reserve has held its benchmark interest rate steady at a 23-year high since July 2023, following eleven hikes over the preceding sixteen months. The policy stance is described as restrictive. Recent communications from Fed officials, including the June 2024 FOMC statement and economic projections, indicate a focus on gaining greater confidence that inflation is moving sustainably toward 2% before considering any rate cuts. The most recent inflation data has shown modest progress, but officials have stated they need to see more good data before easing policy. Markets are currently focused on the timing and pace of potential rate cuts in 2024 and 2025, with the question of a hike in January 2026 being a distant scenario contingent on a significant reacceleration of inflation or economic growth.
The FOMC is the monetary policymaking body of the Federal Reserve System. It consists of twelve members: the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. This committee meets eight times a year to set the target for the federal funds rate.
A basis point is a unit of measure equal to one-hundredth of a percentage point (0.01%). It is the standard unit for discussing changes in interest rates and bond yields. A 25-basis-point hike equates to a 0.25% increase in the federal funds rate target.
While the Fed does not directly set mortgage rates, its federal funds rate decisions heavily influence them. Mortgage rates are primarily tied to the 10-year Treasury yield, which moves in anticipation of and in reaction to Fed policy. A rate hike typically pushes Treasury yields and, consequently, mortgage rates higher, making home loans more expensive for buyers and refinancers.
The Fed analyzes a wide range of data with a focus on its dual mandate of price stability and maximum employment. Key indicators include the Personal Consumption Expenditures (PCE) price index (especially core PCE), the Consumer Price Index (CPI), the unemployment rate, wage growth (like Average Hourly Earnings), job openings, retail sales, and Gross Domestic Product (GDP) growth.
According to the market's note from April 28, 2025, if the scheduled FOMC meeting is canceled and does not occur on its scheduled date, then the outcome for 'Fed maintains current rate' would be triggered. This rule is designed to address the highly unlikely but possible scenario of an event preventing the normal meeting from taking place.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
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5 markets tracked
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| Market | Platform | Price |
|---|---|---|
Will the Federal Reserve Hike rates by 0bps at their January 2026 meeting? | Kalshi | 96% |
Will the Federal Reserve Cut rates by 25bps at their January 2026 meeting? | Kalshi | 6% |
Will the Federal Reserve Hike rates by >25bps at their January 2026 meeting? | Kalshi | 1% |
Will the Federal Reserve Hike rates by 25bps at their January 2026 meeting? | Kalshi | 1% |
Will the Federal Reserve Cut rates by >25bps at their January 2026 meeting? | Kalshi | 1% |
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