Market prices put a 77.6% probability on the Federal Reserve setting its benchmark interest rate target range at 4%-4.25% at its Dec. 9 meeting, according to US prediction exchange Kalshi.
That would put the range 25 basis points above the current 3.75%-4% level, which the Federal Reserve Bank of New York listed as of Nov. 6. A basis point is one hundredth of a percentage point.
Kalshi is a US exchange regulated by the Commodity Futures Trading Commission. The quotes came from its live feed at 16:01:45 UTC on Nov. 9, with contract volume for the December meeting at about 4.5 million.
These are market prices, not a forecast or a survey. The probabilities describe the pricing of possible target ranges at each meeting, with the later distributions built from the outcomes priced for earlier meetings.
For December, the remaining distribution put 19% on the current 3.75%-4% range, 1.5% on 3.5%-3.75%, 1.5% on 4.25%-4.5% and 0.5% on 3.25%-3.5%. The current range was the second most likely outcome.
The implied expected upper end of the December target range was 4.20%. This measure combines the possible upper limits using their market probabilities, rather than identifying the single range with the highest price.
For the Jan. 27, 2027, meeting, prices put 62.1% on a 4%-4.25% range. The distribution put 17.2% on 3.75%-4%, 16.4% on 4.25%-4.5%, 2.2% on 3.5%-3.75%, 1.4% on 4.5%-4.75% and 0.5% on 3.25%-3.5%.
The implied expected upper end for January was 4.24%. The 4%-4.25% band remained the most likely outcome, while the probability of a 4.25%-4.5% range was higher than for December.
For March 17, 2027, prices put 41.8% on 4%-4.25%, 32.4% on 4.25%-4.5%, 13.7% on 3.75%-4% and 7.8% on 4.5%-4.75%. The implied expected upper end was 4.32%.
The rest of March's distribution put 2.9% on 3.5%-3.75%, 0.8% on 4.75%-5%, 0.6% on 3.25%-3.5% and 0.1% on 3%-3.25%. The 4%-4.25% range led the pricing at all three meetings.
Each meeting's market prices five possible decisions: cuts of 50 or 25 basis points, no change, or increases of 25 or 50 basis points. The target-range distributions chain those probabilities forward from the current range.
That means the January and March bands reflect possible combinations of decisions across successive meetings. They do not describe only the size of a rate change at the meeting named.