How many Fed rate cuts in 2026?
Short Answer
The Federal Reserve is expected to implement no rate cuts in 2026, maintaining the federal funds rate amid persistent inflation and hawkish guidance from Chair Kevin Warsh. The FOMC has held rates at 3.50%–3.75% as of September 1, 2026, a consensus priced at 89.0%.
1. Market Behavior & Drivers
The market's high probability for zero Fed rate cuts in 2026 is anchored by the Federal Reserve's stated policy. The Federal Open Market Committee (FOMC) held the federal funds target range at 3.50% to 3.75% through its July 2026 meeting. With data effective through late August showing no policy changes, the market price reflects the fact that no rate cuts have been implemented as of September 1.
The minor upward drift in probability, from 85.2% to 88.9%, occurred on zero traded volume. This indicates the price change is not driven by trader conviction or new capital entering the market. Instead, the movement likely reflects an algorithmic adjustment based on the passage of time, as each month without a rate cut increases the odds that the full year will conclude with none.
- Since last update (~28d): Our model increased 0 cuts by 8.0pp; the edge flipped, model-led.
- The model decreased 1 cut by 3.2pp, with the edge flipping, model-led.
- Confidence declined by 1.0pp over the past 665.8 hours.
- Model for 12+ cuts fell 0.9pp; edge compressed, model-led.
- Zero rate cuts in 2026 appears likely, supported by hawkish Fed policy.
- June 2026 SEP projected median 3.8% rate; nine FOMC members favored hikes.
- Chair Warsh's August 2026 speech emphasized inflation remains above 2% target.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| 0 (0 bps) | 89.0% | 89.6% | Fed statements and Chair Warsh's hawkish remarks emphasize combating persistent inflation, making cuts improbable. |
| 11 (275 bps) | 0.1% | 0.1% | This requires an extreme collapse in economic activity, contrary to the Fed's hawkish stance and market expectations. |
| 10 (250 bps) | 0.1% | 0.1% | Ten cuts would require an extreme collapse in economic activity or inflation, contrary to the Fed's hawkish stance. |
| 9 (225 bps) | 0.2% | 0.2% | Nine cuts would require an extreme collapse in economic activity or inflation, contrary to the Fed's hawkish stance. |
| 6 (150 bps) | 0.2% | 0.2% | Six cuts would require an extreme collapse in economic activity or inflation, contrary to the Fed's hawkish stance. |
Current Context
Zero Fed rate cuts are expected in 2026 based on current data. As of September 1, 2026, the Federal Reserve has not implemented any interest rate cuts for the year. The federal funds target range stands at 3.50% to 3.75%, a level maintained at the July 2026 FOMC meeting, with data effective through August 28, 2026 [^][^][^][^][^][^][^][^][^]. Prediction markets, such as Polymarket, show an 89% consensus for zero rate cuts in 2026 [^].
Persistent inflation and hawkish signals drive expectations for rate hikes. Current market expectations and expert forecasts from firms like Barclays and J.P. Morgan lean toward potential interest rate increases rather than cuts [^][^]. This outlook is driven by persistent inflation and hawkish signals from Fed Chair Kevin Warsh [^][^]. At recent FOMC meetings, including the July 2026 meeting, some committee members actively dissented in favor of rate increases [^][^][^][^][^].
External factors and non-standard terminology appear in broader discussions. Commentary from the Federal Reserve suggests policy is not restrictive for the general economy due to AI's assistance, despite implications for housing issues [^]. The phrase "Economy Rewards 200, 4.5, 50 Deprec" is not standard economic terminology; it appears contextually related to social media, gaming, or crypto-financial trend aggregators [^][^][^].
2. Price Chart
Historical Price (Probability)
Outcome probability
Date
3. Market Data
Contract Snapshot
A "YES" resolution occurs if the Federal Reserve makes the exact specified number of 25 basis point (bps) rate cuts in 2026, including emergency cuts and any cuts made during the December meeting. Cuts between 1–24 bps count as one cut, and larger cuts are calculated in 25 bps increments. The market will resolve "NO" early if the specified number of cuts becomes impossible. This market remains open until December 31, 2026, 11:59 PM ET, with resolution based on FOMC statements and the official Federal Reserve website.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Last trade probability |
|---|---|---|---|
| 0 (0 bps) | $0.89 | $0.11 | 89% |
| 1 (25 bps) | $0.08 | $0.93 | 7% |
| 2 (50 bps) | $0.03 | $0.97 | 3% |
| 3 (75 bps) | $0.01 | $0.99 | 1% |
| 4 (100 bps) | $0.00 | $1.00 | 0% |
| 5 (125 bps) | $0.00 | $1.00 | 0% |
| 12+ (300+ bps) | $0.00 | $1.00 | 0% |
| 6 (150 bps) | $0.00 | $1.00 | 0% |
| 7 (175 bps) | $0.00 | $1.00 | 0% |
| 8 (200 bps) | $0.00 | $1.00 | 0% |
| 9 (225 bps) | $0.00 | $1.00 | 0% |
| 10 (250 bps) | $0.00 | $1.00 | 0% |
| 11 (275 bps) | $0.00 | $1.00 | 0% |
Market Discussion
Market participants overwhelmingly anticipate zero Federal Reserve rate cuts in 2026, with an 88.9% probability reflecting a strong consensus for maintaining current rates. This expectation is primarily driven by persistent elevated inflation (PCE near 4.1%), a resilient labor market (unemployment around 4.2-4.3%), and a hawkish FOMC stance, including projections for higher rates and a 'higher-for-longer' policy. While softer inflation or a sharp labor market deterioration could theoretically lead to cuts, current economic indicators and FOMC communications provide little support for such actions.
4. Trader Dashboard
A deterministic, per-market integrity scorecard computed from order-book and price data. Higher is better for Trader Trust, Liquidity, Move Quality and Resolution; higher means more risk for Quote Risk and Avoid Risk.
0 (0 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
1 (25 bps)Trader Trust—Liquidity—Move Quality91Resolution—Quote Risk—Avoid Risk—
Move Quality91Confirmed
- Factor
- Factor
- flow_agreement
- 1
- move_retained_pct
- 100
2 (50 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- -0.05
3 (75 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- -0.18
4 (100 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
5 (125 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
6 (150 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
7 (175 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
8 (200 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (24h)
- Factor
- move_log_odds
- 0
9 (225 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (24h)
- Factor
- move_log_odds
- 0
10 (250 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (24h)
- Factor
- move_log_odds
- 0
11 (275 bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (24h)
- Factor
- move_log_odds
- 0
12+ (300+ bps)Trader Trust—Liquidity—Move Quality—Resolution—Quote Risk—Avoid Risk—
Move Quality—No significant move (6h)
- Factor
- move_log_odds
- 0
trader_dashboard_lean_v1.14 · computed Sep 5, 2026
5. What specific inflation and unemployment data points in the second half of 2026 would be required to shift the FOMC's consensus from hawkish to considering a rate cut?
| Core PCE Inflation (April 2026) | 3.8% [^][^][^][^] |
|---|---|
| Unemployment Rate | 4.3% [^][^][^][^] |
| FOMC Inflation Target | 2% [^][^][^][^] |
Rate cuts require sustained inflation cooling and a weakening labor market. To prompt the Federal Open Market Committee (FOMC) to consider a rate cut in the second half of 2026, significant and sustained evidence of cooling inflation, specifically core Personal Consumption Expenditures (PCE), coupled with a weakening labor market would be essential [^][^][^]. This policy shift would necessitate a reversal of the current supply-shock-driven inflationary environment, indicating that high inflation is no longer becoming embedded in the economy, or that a sharper-than-expected downturn in economic activity and the labor market has occurred [^][^][^]. Sustained inflation deceleration would be critical for such a policy pivot [^].
FOMC remains hawkish due to current inflation and strong labor. As of mid-2026, the FOMC maintains a hawkish stance because core PCE inflation was at 3.8% in April 2026, well above the 2% target, and the labor market remained resilient with unemployment at 4.3% [^][^][^][^]. Federal Reserve officials prioritize a data-dependent approach, focusing on incoming PCE inflation data, labor market stability, and spending resilience [^][^][^]. While the need for significant, sustained evidence of cooling inflation and a weakening labor market is clear for rate cut considerations, specific numerical thresholds for core PCE or the unemployment rate to shift the consensus are not specified in the available information [^][^][^].
6. What public statements from Fed Chair Kevin Warsh and other voting FOMC members in 2026 support the market's strong consensus for zero rate cuts?
| Fed Chair Warsh took office | May 22, 2026 [^][^][^] |
|---|---|
| June 2026 FOMC vote | 12-0 to maintain federal funds rate at 3.5%–3.75% [^][^] |
| 2026 Zero Rate Cuts Probability | Approximately 82% (as of September 1, 2026) [^][^] |
Federal Reserve Chair Kevin Warsh, who assumed office on May 22, 2026 [^] [^] [^] , has consistently supported a policy of zero rate cuts. Warsh" data-source-lanes="traditional">[^][^][^], has consistently supported a policy of zero rate cuts. In his August 2026 Jackson Hole address, Warsh highlighted persistent inflation above the 2% target, suggesting that interest rates might need to be raised if inflation trends do not improve [^][^][^]. This stance was reinforced when the Federal Reserve officially removed its easing bias during his inaugural FOMC meeting in mid-June 2026 [^]. Under Warsh's leadership, the FOMC unanimously voted (12-0) in June 2026 to maintain the federal funds rate at 3.5%–3.75%, emphasizing the necessity for price stability amid elevated inflation [^][^].
Other voting FOMC members also express views consistent with a higher-for-longer interest rate policy. Cleveland Fed President Beth Hammack dissented at the July 2026 FOMC meeting, advocating for an increase in the federal funds rate [^]. Similarly, New York Fed President John Williams stated in both May and July 2026 that the current monetary policy, with rates at 3.5%–3.75%, was appropriate for balancing risks and achieving the 2% inflation goal [^][^].
7. How do the 2026 rate path forecasts from Barclays and J.P. Morgan compare to the Federal Reserve's own Summary of Economic Projections (SEP) dot plot?
| FOMC Median Fed Funds Rate Projection (Year-End 2026) | 3.8% (June 2026 SEP) [^][^][^][^][^] |
|---|---|
| FOMC Participants Projecting Rate Hike in 2026 | Nine of 18 [^][^][^][^] |
| Market Median Fed Funds Rate Forecast (Year-End 2026) | 3.63% (June 2026 New York Fed SME) [^] |
The Federal Reserve's June 2026 SEP showed a hawkish shift in its outlook. The median year-end 2026 federal funds rate was projected at 3.8% [^][^][^][^][^]. This effectively removed prior expectations for rate cuts in 2026; notably, nine of 18 FOMC participants even anticipated at least one rate hike for the year [^][^][^][^]. Consequently, major investment banks like J.P. Morgan and Barclays have adjusted their base case to reflect the Federal Reserve remaining on hold for the remainder of 2026, with some analysts identifying a potential for rate hikes instead of cuts as of September 2026 [^][^][^].
Market consensus for 2026 rates remains slightly below Fed projections. In contrast to the FOMC's outlook, the New York Fed's Survey of Market Expectations (SME) provides a comparative view. The median federal funds rate forecast for the end of 2026 from the June 2026 SME was 3.63% [^]. This market expectation consistently indicates a federal funds rate forecast that is slightly lower than the FOMC's median dot plot projection (3.63% compared to 3.8%) [^][^][^][^][^][^].
8. Where can traders find the historical and most recent releases of the Federal Reserve's Summary of Economic Projections (SEP) and 'dot plots' for 2026?
| Latest SEP Release Date (as of Sep 1, 2026) | June 17, 2026 [^] |
|---|---|
| Median 2026 Federal Funds Rate Projection (June 2026 SEP) | 3.8% [^][^][^][^] |
| Market Expectation for Rate Hikes (Aug 2026) | One rate hike for remainder of 2026 [^] |
Traders can find historical and recent Federal Reserve projections from official sources. The Federal Reserve's Summary of Economic Projections (SEP), including the "dot plot," is available on the official Federal Reserve website (federalreserve.gov), typically as an addendum to the FOMC meeting minutes [^][^][^]. These projections are also aggregated and accessible through the St. Louis Fed's FRED database (fred.stlouisfed.org) and ALFRED (Archival Federal Reserve Economic Data) databases [^][^][^].
The latest SEP dot plot offered a hawkish outlook for 2026. As of September 1, 2026, the most recent SEP dot plot was released on June 17, 2026 [^]. This specific release indicated a median 2026 federal funds rate projection of 3.8% and reflected a hawkish outlook when compared to earlier 2026 projections [^][^][^][^].
Market expectations for 2026 rate changes are accessible through financial tools. The CME FedWatch Tool allows traders to view Fed rate probabilities and includes a visualization of the FOMC's 'dot plot,' reflecting members' expectations for the federal funds rate [^]. As of August 2026, market expectations, as priced in the CME FedWatch Tool, suggested one rate hike for the remainder of 2026, which contrasted with earlier expectations of a cutting cycle [^].
9. What probability for 2026 rate cuts is implied by financial instruments like the CME FedWatch Tool and the Treasury yield curve?
| Probability of 0 Fed rate cuts in 2026 | 88–90% [^][^][^][^] |
|---|---|
| Probability of 25bps hike in Sep 2026 FOMC | 57–60% [^][^][^][^] |
| 30-year Treasury yield trend | Began declining in February 2026 [^] |
Financial instruments suggest very low probability of Federal Reserve rate cuts in 2026. Market expectations generally lean towards either a hold on current rates or further rate hikes for the year. As of September 1, 2026, prediction markets overwhelmingly anticipate zero Federal Reserve rate cuts for the remainder of 2026, with an implied probability of approximately 88–90% for "exactly 0 cuts" [^][^][^][^].
The CME FedWatch Tool indicates a bias towards rate hikes or holds. Utilizing 30-day Fed Funds futures, the tool reflects a market environment where traders are increasingly pricing in the possibility of further rate hikes rather than cuts by year-end 2026, primarily driven by persistent inflation concerns [^][^][^][^]. For the September 2026 Federal Open Market Committee (FOMC) meeting, market expectations favor either a hold on rates or a 25 basis point hike. Prediction platforms are pricing a "Hike 25bps" outcome at approximately 57–60% and a "Fed maintains rate" outcome at roughly 38–44% [^][^][^][^].
Treasury yield curve movements complicate precise rate cut expectation analysis. As of mid-2026, U.S. Treasury yields, including the 2-year note, have demonstrated independent movement from Federal Reserve policy, making a simple reading of the yield curve for precise rate cut expectations more complex [^]. Specifically, 2-year yields have shown recent upward pressure, while the 30-year yield began declining in February 2026 [^].
10. What Could Change the Odds
Key Catalysts
Prediction markets assign a negligible probability, around 1%, to a Federal Reserve rate cut at the upcoming September 15-16, 2026, FOMC meeting [^] [^] [^] [^] [^] [^] [^] . (Live) | MacroOdds" data-source-lanes="traditional">[^][^][^][^][^][^]. The consensus in early September 2026 is that the FOMC is more likely to hold or hike rates, with a 25-basis-point hike priced at approximately 56%–60% by various venues like Kalshi and Polymarket [^][^][^][^][^].
Market sentiment shifted toward a hawkish outlook following comments from Fed Chair Kevin Warsh at the Jackson Hole symposium in late August 2026 [^] [^] [^] . | StockCram" data-source-lanes="traditional">[^][^][^]. Warsh emphasized the need to combat persistent inflation [^][^][^]. This shift aligns with the CME FedWatch market-implied outlook, which as of early August 2026, priced in one rate hike for the remainder of 2026, marking a significant departure from earlier expectations [^].
Polymarket data from early September 2026 shows traders heavily favoring zero rate cuts for the remainder of 2026, assigning an 89% probability to the '0 cuts' outcome [^] . — Compare Odds on 7 Platforms | CoinRithm" data-source-lanes="traditional">[^]. The FOMC's median projection for the federal funds rate at the end of 2026, published June 17, 2026, was 3.8% [^]. Market expectations from the June 2026 Survey of Market Expectations (SME) indicated a median modal forecast of 3.63% through the end of 2026 [^].
Key Dates & Catalysts
- Closes: December 31, 2026
11. Decision-Flipping Events
- Trigger: Prediction markets assign a negligible probability, around 1%, to a Federal Reserve rate cut at the upcoming September 15-16, 2026, FOMC meeting [^] [^] [^] [^] [^] [^] [^] .
- Trigger: The consensus in early September 2026 is that the FOMC is more likely to hold or hike rates, with a 25-basis-point hike priced at approximately 56%–60% by various venues like Kalshi and Polymarket [^] [^] [^] [^] [^] .
- Trigger: Market sentiment shifted toward a hawkish outlook following comments from Fed Chair Kevin Warsh at the Jackson Hole symposium in late August 2026 [^] [^] [^] .
- Trigger: Warsh emphasized the need to combat persistent inflation [^] [^] [^] .
13. Historical Resolutions
No historical resolution data available for this series.
