Fed funds rate after Apr 2027 meeting?
Short Answer
The model assigns meaningfully lower odds for the Fed funds rate to be above 0.00% after the April 2027 meeting (80.3%) compared to the market (92.0%). This divergence is driven by expectations for rate cuts into 2026 and a convergence towards the neutral rate.
1. Market Behavior & Drivers
This market has exhibited a generally upward trend, starting at an 87.0% probability and currently trading at its peak of 92.0%. The price has remained within a relatively tight 12-point range, from a low of 80.0% to the current high, indicating consistently strong positive sentiment. A notable period of volatility occurred in early April 2026, where the price dipped to 83.0% before spiking to 92.0% over several days. The provided context does not offer specific information to explain the cause of these significant price movements.
Total trading volume is modest at 340 contracts, which may suggest limited market liquidity. The price swings noted in the sample data occurred on zero volume, indicating these changes were not driven by executed trades at those moments. This low volume suggests that while sentiment is high, the market's conviction has not been tested by significant trading activity. Key price levels have been established, with 92.0% acting as resistance and the 80.0% mark serving as the primary support. Overall, the chart indicates a strong and strengthening belief among participants that the outcome will be YES, but the price could be sensitive to future trading activity given the low volume to date.
- FOMC projects 2.8% longer-run federal funds rate.
- Market expects six 25-basis-point rate cuts through 2026.
- Increasing fiscal dominance risk suggests lower rates by April 2027.
- CBO projects significant increases in U.S. net interest costs.
- Federal funds rate is expected to converge towards its neutral level.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above 3.50% | 42.0% | 21.8% | The FOMC's longer-run projection of 2.8% suggests a lower rate by April 2027. |
| Above 3.25% | 54.0% | 30.5% | The FOMC's longer-run projection of 2.8% suggests a lower rate by April 2027. |
| Above 4.00% | 29.0% | 14.1% | The FOMC's longer-run projection of 2.8% suggests a lower rate by April 2027. |
| Above 4.25% | 23.0% | 10.9% | The FOMC's longer-run projection of 2.8% suggests a lower rate by April 2027. |
| Above 3.75% | 40.0% | 20.5% | The FOMC's longer-run projection of 2.8% suggests a lower rate by April 2027. |
2. Price Chart
Historical Price (Probability)
Outcome probability
Date
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Above 0.50%
📈 April 10, 2026: 10.0pp spike
Price increased from 74.0% to 84.0%
What happened: No supporting research available for this anomaly.
Outcome: Above 1.00%
📉 April 07, 2026: 8.0pp drop
Price decreased from 81.0% to 73.0%
What happened: No supporting research available for this anomaly.
Outcome: Above 0.75%
📉 April 06, 2026: 8.0pp drop
Price decreased from 81.0% to 73.0%
What happened: No supporting research available for this anomaly.
📈 March 30, 2026: 64.0pp spike
Price increased from 15.0% to 79.0%
What happened: No supporting research available for this anomaly.
4. Market Data
Contract Snapshot
This market resolves to Yes if the upper bound of the target federal funds rate, as published on the Federal Reserve's official website after its April 28, 2027 meeting, is greater than 3.25%; otherwise, it resolves to No. Trading closes at 1:55 PM EDT on April 28, 2027. The market expires at the first 2:05 PM ET following the Federal Reserve's statement release for that meeting, or one week after the last day of the meeting, with all outcomes verified from the Federal Reserve Board of Governors.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| Above 0.00% | $0.92 | $0.13 | 92% |
| Above 0.25% | $0.85 | $0.19 | 88% |
| Above 0.50% | $0.80 | $0.24 | 85% |
| Above 0.75% | $0.82 | $0.26 | 81% |
| Above 1.25% | $0.79 | $0.29 | 79% |
| Above 1.00% | $0.79 | $0.26 | 76% |
| Above 1.50% | $0.72 | $0.29 | 72% |
| Above 1.75% | $0.74 | $0.35 | 72% |
| Above 2.00% | $0.72 | $0.37 | 72% |
| Above 2.25% | $0.68 | $0.34 | 68% |
| Above 2.50% | $0.65 | $0.44 | 65% |
| Above 2.75% | $0.62 | $0.47 | 62% |
| Above 3.25% | $0.54 | $0.53 | 54% |
| Above 3.00% | $0.60 | $0.49 | 51% |
| Above 3.50% | $0.46 | $0.61 | 42% |
| Above 3.75% | $0.40 | $0.68 | 40% |
| Above 4.00% | $0.35 | $0.73 | 29% |
| Above 4.25% | $0.27 | $0.78 | 23% |
Market Discussion
Limited public discussion available for this market.
5. Trust Index
Official decision: one office decides and holds the answer before the public
Integrity risk· Information exposure
How it adds up
Integrity80% of score63Caution
Trade quality20% of score41High Risk
Includes the cost to trade: a $100 order can't be filled here because the order book is too thin.
Trust score58Caution
Weighted blend with hard caps — a critically weak safety pillar, or a severe trading anomaly, caps the total regardless of the rest. Full methodology · About the Trust Index
Trust profile
Integrity4 screens run · 3 don't apply · 3 awaiting data
6. What Is the FOMC's Longer-Run Federal Funds Rate Projection?
| Median Longer-Run Federal Funds Rate | 2.8 percent [1] |
|---|---|
| Initial Projection Date | June 12, 2024 [1] |
| Projection Consistency Period | June 2024 through December 2026 [2] |
The FOMC initially projected a 2.8 percent longer-run federal funds rate. Federal Open Market Committee (FOMC) members established a median projection of 2.8 percent for the longer-run federal funds rate, often referred to as 'r-star' or the neutral rate. This projection was first recorded in the quarterly Summary of Economic Projections (SEP) following the June 12, 2024 meeting [1].
This 2.8 percent projection remained consistent until December 2026. The median longer-run federal funds rate projection held steady at 2.8 percent across all subsequent FOMC meetings. It remained unchanged following the September 18, 2024 meeting [3], the December 18, 2024 meeting [4], and the March 19, 2025 meeting [5]. The 2.8 percent median projection is specifically maintained for all quarterly SEPs through December 2026, including those in March, June, September, and December of both 2025 and 2026 [2].
Sources (5)
- 1The Fed - June 12, 2024: FOMC Projections materials, accessible versionfederalreserve.gov
- 2Longer Run FOMC Summary of Economic Projections for the Fed Funds Rate, Median (FEDTARMDLR) | FRED | St. Louis Fedfred.stlouisfed.org
- 3https://federalreserve.gov/monetarypolicy/files/fomcprojtabl20240918.pdffederalreserve.gov
- 4The Fed - December 18, 2024: FOMC Projections materials, accessible versionfederalreserve.gov
- 5https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20250319.pdffederalreserve.gov
7. Does SF Fed Forecast Demand-Driven Core PCE Inflation for 2025-2026?
| Primary Data Focus | Historical and current contributions to PCE inflation (San Francisco Fed [1]) |
|---|---|
| Quantitative Forecasts for Demand-Driven Core PCE | Not typically published (San Francisco Fed [1]) |
| Forecast Timeframe Availability | Does not extend throughout 2025 and 2026 (San Francisco Fed [1]) |
The Federal Reserve Bank of San Francisco does not forecast future demand-driven inflation contributions. The 'Supply- and Demand-Driven PCE Inflation' data series primarily offers historical and current insights into the contributions of supply- and demand-driven factors to Personal Consumption Expenditures (PCE) inflation [1]. However, this specific data series and its related publications from the San Francisco Fed do not typically publish quantitative forecasts for the contribution of demand-driven factors to core PCE inflation, particularly extending throughout 2025 and 2026 [1].
Other San Francisco Fed publications lack specific multi-year demand-driven inflation projections. While the San Francisco Fed produces various economic outlooks and research, such as Economic Letters and FedViews, these resources generally focus on broader economic trends, overall inflation forecasts, or historical analysis of supply and demand components [2]. These documents do not consistently provide detailed, precise, multi-year projections of the demand-driven contribution to core PCE inflation for specific future periods like 2025 and 2026, directly attributed to the methodology of the 'Supply- and Demand-Driven PCE Inflation' data series. A working paper on decomposing supply and demand-driven inflation also focuses on methodology and historical application rather than future forecasts [3].
8. Who Are the Leading Candidates to Succeed Jerome Powell as Fed Chair?
| Powell's Term Conclusion | May 2026 [1] |
|---|---|
| Prominent Successor Candidates | Kevin Warsh, Kevin Hassett [1] |
| Kevin Warsh's Policy Stance | Advocates rules-based monetary policy, described as an "inflation hawk" [2] |
Several candidates are being considered to replace Jerome Powell in 2026. Jerome Powell's term as Federal Reserve Chair is scheduled to conclude in May 2026, and discussions are already underway regarding potential successors. The most frequently mentioned individuals include Kevin Warsh and Kevin Hassett [1]. Other names that have emerged in these discussions are Lael Brainard, Glenn Hubbard, and Rick Rieder [1]. Kevin Warsh, in particular, has been a prominent figure, even being hypothetically mentioned as a potential replacement for Powell in a reported scenario in January 2026 [2].
Kevin Warsh advocates for a rules-based monetary policy framework. His public statements and academic work consistently indicate a preference for rules-based monetary policy, distinguishing him from discretionary approaches [3]. Warsh is characterized as an "inflation hawk" [2] and advocates for the Federal Reserve to focus on its core responsibilities of maintaining price stability and achieving maximum employment through a transparent, rules-based framework [3]. His article, "Priorities on the Path to Normalization," further outlines his inclination towards a structured and predictable monetary policy [4]. However, if appointed, Warsh might face an "uphill battle" or "struggle" in transitioning the Federal Reserve from its current discretionary decision-making model to a more rules-based one [5].
Detailed policy leanings for other candidates are not extensively documented. While Kevin Hassett is also identified as a likely successor [6], the available research does not detail his specific views on rules-based versus discretionary policy. Similarly, specific policy leanings for other mentioned candidates, such as Lael Brainard, Glenn Hubbard, or Rick Rieder, are not elaborated upon in the current research [1].
Sources (6)
- 1Federal Reserve Chair Frontrunners 2026: Who Could Replace J | InsideHintinsidehint.com
- 2Trump nominates inflation hawk Kevin Warsh to replace Jerome Powell as Fed chair | CNN Businesscnn.com
- 3What Are Kevin Warsh’s Plans for the Fed?city-journal.org
- 4Priorities on the Path to Normalization | Cato Institutecato.org
- 5Warsh may struggle to lay down new rules of the road for Fed | MarketScreenermarketscreener.com
- 6Powell’s Fed Term Ends in May 2026. Hassett Emerges as Likely Successor - GV Wiregvwire.com
9. How Do CBO Projections for U.S. Net Interest Costs Impact Fiscal Dominance?
| CBO 2025 Net Interest Projection (2034) | 3.9% of GDP by 2034 [1] |
|---|---|
| CBO 2026 Net Interest Projection (2035) | 6.3% of GDP by 2035 [2] |
| Net Interest Costs in 2025 (Initial) | 3.1% of GDP [1] |
CBO projections show a significant increase in net interest costs. The Congressional Budget Office initially projected in its 2025 'Budget and Economic Outlook' that U.S. net interest costs would rise from 3.1% of GDP in 2025 to 3.9% by 2034 [1]. However, the subsequent 2026 outlook presented a substantially revised and higher trajectory, forecasting these costs to grow from 3.1% of GDP in 2025 to a significantly higher 6.3% of GDP by 2035 [2]. This revision represents a near doubling of the projected net interest burden as a share of the economy over the decade compared to the earlier report's outlook for its 10-year period.
This trajectory indicates a heightened risk of fiscal dominance. Fiscal dominance describes a situation where monetary policy decisions are constrained by the government's need to finance its debt, potentially pressuring the central bank to maintain lower interest rates than necessary for inflation control to ease government borrowing costs [2]. With net interest costs projected to reach 6.3% of GDP by 2035, the pressure on policymakers to address the rising debt burden intensifies [2].
Fiscal obligations could undermine monetary policy independence and stability. Such a substantial fiscal obligation could increase incentives for fiscal authorities to advocate for, or indirectly influence, monetary policies that reduce the cost of government borrowing. This situation heightens concerns about the independence of monetary policy and its ability to solely focus on price stability, potentially impacting the overall economic stability and long-term fiscal health of the nation.
10. What Do SOFR Futures Predict for 2025 and 2026 Rate Cuts?
| Anticipated 2025 Rate Cuts | Four 25-basis-point cuts (100 basis points total) [1] |
|---|---|
| Anticipated 2026 Rate Cuts | Two 25-basis-point cuts (50 basis points total) [1] |
| Projected Fed Funds Rate End 2025 | Approximately 3.82% [1] |
SOFR futures anticipate six 25-basis-point rate cuts through 2026. Market participants currently expect a total of six 25-basis-point rate cuts (150 basis points of easing) priced into the SOFR futures curve across 2025 and 2026. Specifically, four 25-basis-point rate cuts (100 basis points of easing) are priced in for 2025, which would lower the federal funds rate to approximately 3.82% by the end of that year [1]. An additional two 25-basis-point cuts (50 basis points) are anticipated for 2026 [1]. These market projections are generally more aggressive than the Federal Reserve's latest official forecasts for the same periods [1].
Market expectations for rate cuts frequently adjust after FOMC meetings. The pricing of these rate cuts within the SOFR futures curve is highly responsive to new economic data, geopolitical events, and particularly statements and projections from each Federal Open Market Committee (FOMC) meeting. Market expectations can shift significantly as traders react to the Fed's dot plot, economic forecasts, and guidance from officials [1]. Tools such as the CME FedWatch Tool are closely monitored to gauge the probability of rate changes by analyzing futures data [2]. Historically, a divergence has often existed between market expectations and the Fed's official projections [3].
Sources (3)
12. Historical Resolutions
Historical Resolutions: 20 markets in this series
Outcomes: 6 resolved YES, 14 resolved NO
Recent resolutions:
- KXFED-26MAR-T5.25: NO (Mar 18, 2026)
- KXFED-26MAR-T5.00: NO (Mar 18, 2026)
- KXFED-26MAR-T4.75: NO (Mar 18, 2026)
- KXFED-26MAR-T4.50: NO (Mar 18, 2026)
- KXFED-26MAR-T4.25: NO (Mar 18, 2026)
