Market prices put an 84.2% probability on the Federal Reserve raising its target interest rate range by a quarter percentage point at its Dec. 9 meeting, according to Kalshi.
The distribution shifts toward higher rates at the following meeting on Jan. 27, 2027. The two largest probabilities then sit in adjacent bands, with the lower band holding a narrow lead.
Kalshi is a US prediction exchange regulated by the Commodity Futures Trading Commission. The live-feed quotes were taken at 16:01:26 UTC on Nov. 10, and contract volume for the December meeting stood at about 7.4 million.
These are market prices, not a forecast or a survey. The federal funds target range, the central bank's benchmark range for overnight borrowing between banks, was 3.75%-4% as of Nov. 9, the Federal Reserve Bank of New York said.
For December, the 4%-4.25% band carried the largest probability. The 4.25%-4.50% band had an 11.3% probability, while the current 3.75%-4% range carried 3.4%.
The two lower December bands, 3.25%-3.50% and 3.50%-3.75%, each carried a 0.5% probability. The implied expected upper limit of the target range was 4.26%, compared with the current upper limit of 4%.
For January, the probability of a 4%-4.25% range was 46.1%, followed by 43% for 4.25%-4.50%. A higher 4.50%-4.75% range carried 6.2%.
The current range carried a 3.3% probability for January. The probabilities were 0.9% for 3.50%-3.75%, 0.3% for 3.25%-3.50% and 0.2% for 4.75%-5%.
The implied expected upper limit rose to 4.37% for January. That measure weights the possible upper limits by their probabilities, rather than selecting the single most likely band.
By the March 17, 2027 meeting, the largest probability shifted to 4.25%-4.50%, at 41.3%. The 4.50%-4.75% band carried 24.6%, followed by 24% for 4%-4.25%.
March probabilities were 4.5% for the current range, 4.2% for 4.75%-5% and 1% for 3.50%-3.75%. The 3.25%-3.50% and 5%-5.25% bands each carried 0.2%. The implied expected upper limit was 4.49%.
Each meeting's market prices five possible decisions: cuts of half or a quarter percentage point, no change, or increases of a quarter or half percentage point. The distributions above combine those probabilities across successive meetings, starting from the current target range.