$341.78M
1
4
$341.78M
1
4
Trader mode: Actionable analysis for identifying opportunities and edge
The FED interest rates are defined in this market by the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings. This market will resolve to the amount of basis points the upper bound of the target federal funds rate is changed by versus the level it was prior to the Federal Reserve's January 2026 meeting. If the target federal funds rate is changed to a level not expressed in the displayed opt
Prediction markets are pricing in near-certainty that the Federal Reserve will hold interest rates steady after its January 2026 meeting. On Polymarket, the "No change" contract trades at 95¢, implying a 95% probability. This overwhelming confidence suggests traders view a rate hike or cut as highly improbable, expecting the Fed to maintain its current policy stance to close out the first month of 2026.
The market's high conviction stems from two primary factors. First, the implied timeline aligns with the Fed's typical deliberative pace; by January 2026, the central bank is widely expected to have already reached its long-term neutral rate, entering a prolonged hold period. Second, current macroeconomic projections, including stable inflation near the 2% target and moderate growth, support a narrative of policy stability rather than further adjustment. The market is essentially pricing in a successful "soft landing" scenario where the Fed's work is done.
While the consensus is strong, the remaining 5% probability reflects tail risks. A significant upside inflation surprise in the December 2025 CPI report or an unexpected geopolitical shock disrupting global supply chains could revive hawkish fears. Conversely, a sudden deterioration in labor market data could force markets to reprice the small chance of a preemptive cut. The release of the December 2025 FOMC meeting minutes and subsequent speeches by Fed officials will be critical for gauging any shift in the committee's tone ahead of this meeting.
AI-generated analysis based on market data. Not financial advice.
This prediction market focuses on the potential change to the Federal Reserve's benchmark interest rate following the Federal Open Market Committee (FOMC) meeting scheduled for January 2026. Specifically, it tracks the upper bound of the target federal funds rate, which is the interest rate at which depository institutions lend reserve balances to other banks overnight. The market resolves based on the number of basis points this upper bound is adjusted compared to its level prior to the January 2026 meeting. The FOMC, the Fed's monetary policy-setting body, typically meets eight times a year, with its decisions on the federal funds rate being a primary tool for managing inflation and economic growth. Interest in this specific meeting stems from its position in the economic calendar, potentially setting the tone for monetary policy in the first quarter of 2026. Market participants, including investors, economists, and financial institutions, closely analyze these decisions as they directly influence borrowing costs, asset valuations, and currency strength. The anticipation and outcome of this meeting will be shaped by prevailing economic data on inflation, employment, and GDP growth in late 2025 and early 2026.
The Federal Reserve's use of the federal funds rate as its primary policy tool has evolved significantly since the 1970s. Under Chair Paul Volcker in the early 1980s, the Fed aggressively raised rates to combat double-digit inflation, with the federal funds rate peaking above 19% in 1981. This period established the Fed's credibility as an inflation fighter. The subsequent "Great Moderation" saw a long period of declining and stable rates. A critical modern precedent is the December 2008 meeting, when the FOMC lowered the target range to 0-0.25% in response to the Global Financial Crisis, initiating a near-zero interest rate policy (ZIRP) that lasted seven years. The first rate hike of the modern cycle came in December 2015. More recently, the Fed slashed rates to zero again in March 2020 during the COVID-19 pandemic. The aggressive tightening cycle that began in March 2022, with 11 rate hikes over 16 months, was the most rapid since the Volcker era, raising the upper bound from 0.25% to 5.50% by July 2023. This historical arc of dramatic shifts between easing and tightening cycles provides the backdrop for any January 2026 decision.
The Federal Reserve's interest rate decision has profound ripple effects across the global economy. A change in the federal funds rate directly influences the cost of borrowing for consumers and businesses, affecting everything from mortgage rates and car loans to corporate bond yields and business investment decisions. This, in turn, impacts employment, consumer spending, and overall economic growth. For financial markets, interest rate expectations drive valuations across asset classes. Equity markets often react negatively to rate hikes, which increase discount rates for future earnings, while the U.S. dollar typically strengthens, affecting international trade and emerging market economies. The Fed's decision also carries significant political weight, as administrations often face public scrutiny over economic conditions influenced by monetary policy. For the average household, the outcome influences savings account yields, loan affordability, and the broader cost of living, making the FOMC's actions a cornerstone of economic stability and personal financial health.
As of late 2024, the Federal Reserve has paused its rate-hiking cycle initiated in 2022, holding the target range steady while monitoring incoming economic data. The focus has shifted toward determining when to begin lowering rates, with the timing and pace dependent on sustained progress toward the 2% inflation target. Market participants, as reflected in futures contracts, are actively debating the trajectory of policy through 2025 and into 2026. The economic data releases in the months leading up to January 2026, particularly on inflation and the labor market, will be the primary determinants of the FOMC's decision at that meeting.
The federal funds rate is the interest rate banks charge each other for overnight loans of reserve balances. The Fed influences it by setting a target range and using open market operations, like buying or selling Treasury securities, to adjust the supply of bank reserves and push the market rate toward its target.
While not directly set by the Fed, mortgage rates, particularly for 30-year fixed loans, are heavily influenced by long-term bond yields like the 10-year Treasury. Fed rate changes affect short-term rates immediately and shape expectations for future economic growth and inflation, which in turn drive long-term yields and mortgage pricing.
The Federal Reserve is the central banking system of the United States. The Federal Open Market Committee (FOMC) is the body within the Fed that is specifically responsible for setting national monetary policy, including the target for the federal funds rate. The FOMC consists of the seven Fed Governors and five of the twelve regional Federal Reserve Bank presidents.
A basis point is one-hundredth of a percentage point (0.01%). A 25 basis point change in the federal funds rate equates to a 0.25% move. This is the standard increment for most Fed rate adjustments, making it a critical unit for financial markets and prediction markets tracking policy changes.
The January meeting is often the first scheduled meeting of the calendar year, providing the Fed an early opportunity to adjust its policy stance based on year-end economic data and set the initial direction for monetary policy in the new year. It follows the release of important Q4 GDP and employment data.
Educational content is AI-generated and sourced from Wikipedia. It should not be considered financial advice.
Share your predictions and analysis with other traders. Coming soon!
4 markets tracked
No data available
| Market | Platform | Price |
|---|---|---|
| Poly | 94% |
| Poly | 6% |
| Poly | 0% |
| Poly | 0% |
No related news found
Add this market to your website
<iframe src="https://predictpedia.com/embed/wkRYI5" width="400" height="160" frameborder="0" style="border-radius: 8px; max-width: 100%;" title="Fed decision in January?"></iframe>