This market has settled: RESOLVED
Settled on April 10, 2026
Will 1 Fed rate cut happen in 2026?
Will 1 Fed rate cut happen in 2026? Odds: 25.5% YES on Polymarket. See live prices and trade this market.
The market pricing just a 24.5% chance of even a single Fed rate cut in 2026 reflects deep trader skepticism that inflation will cooperate enough to allow meaningful monetary easing two years from now. This matters because it signals expectations that either inflation remains sticky above target or the economy proves resilient enough that the Fed maintains restrictive policy throughout 2026.
Current Odds
| Platform | Yes | No | Volume | Trade |
|---|---|---|---|---|
| Polymarket | 24.5% | 75.5% | $981K | Trade on Polymarket |
Market Analysis
The bull case for rate cuts centers on inflation continuing its disinflation trajectory toward the Fed’s 2% target. If core PCE inflation reaches 2.2-2.5% by late 2025 and labor markets cool further—with unemployment rising to 4.5% or higher—the Fed would have room to cut rates even in a soft-landing scenario. Monthly CPI and jobs reports throughout 2025 will be critical leading indicators, particularly the employment cost index releases in January, April, July, and October 2025 that measure wage pressures. A recession scenario in late 2025 would dramatically increase cut probabilities as the Fed pivots to support growth.
The bear case dominating current odds assumes persistent inflation keeps the Fed on hold. Services inflation has proven stubborn, and if core CPI remains above 3% through 2025, the Fed won’t cut in 2026 regardless of growth concerns. Housing costs, which lag significantly, could keep inflation elevated even as other components cool. The January 29, 2025 FOMC meeting and subsequent dot plot projections will provide crucial guidance on whether the Fed sees any 2026 cuts in their forecast. Strong productivity growth could also allow the Fed to keep rates higher for longer without triggering recession, eliminating the need for cuts.
Key catalysts include the eight scheduled FOMC meetings in 2025 (January 29, March 19, May 7, June 18, July 30, September 17, October 29, December 10), where any dovish shift in forward guidance would boost cut probabilities. Monthly CPI releases, particularly the January 15, 2025 report covering December data, will establish whether disinflation resumed after recent plateaus. The February 7, 2025 jobs report and subsequent NFP releases through 2025 will determine if labor market cracks appear. Q4 2025 GDP data released in January 2026 will be especially important for assessing whether economic momentum justifies keeping rates elevated through the year.
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Frequently Asked Questions
Does this market require multiple cuts or just one cut at any point during 2026?
Just one rate cut of 25 basis points or more at any FOMC meeting in 2026 would resolve this market as YES. The low odds reflect doubt that even this minimal threshold will be met.
How does this compare to the Fed’s own projections for 2026 policy rates?
The December 2024 dot plot showed the median FOMC member projecting the fed funds rate at 3.4% by end-2026, implying multiple cuts from current levels around 4.25-4.50%. The market is pricing significantly more hawkish outcomes than the Fed’s own forecasts.
What inflation level would likely guarantee no cuts throughout 2026?
If core PCE inflation remains consistently above 2.75% entering 2026, the Fed would almost certainly hold rates steady throughout the year. Sustained inflation at 3% or higher would make cuts virtually impossible absent a severe recession.