Market prices put an 84.2% probability on the Federal Reserve raising its target interest rate range to 4%-4.25% at its Dec. 9 meeting, according to US prediction exchange Kalshi.
That outcome would lift the range by a quarter percentage point from its current level. For the following meeting, on Jan. 27, 2027, the largest probability shifts to a further quarter-point increase.
Kalshi is a US exchange regulated by the Commodity Futures Trading Commission. Its live-feed quotes were taken at 10:00:47 UTC on Nov. 12, with contract volume of about 9 million for the nearest meeting.
These are market prices, not a forecast or a survey. The rate-band probabilities combine each meeting's prices for five possible decisions, carrying the resulting changes forward from the current target range.
The current federal funds target range, the benchmark range the Fed sets for overnight interest rates, was 3.75%-4% as of Nov. 9, the Federal Reserve Bank of New York said. The date of its last change is unavailable.
For December, a 4.25%-4.50% range carried a 10.3% probability, behind the dominant 4%-4.25% band. The current 3.75%-4% range carried a 4.4% probability.
The two lower December bands, 3.25%-3.50% and 3.50%-3.75%, each carried a 0.5% probability. The implied expected upper end of the December target range was 4.26%, a weighted figure across the possible outcomes.
For January, the 4.25%-4.50% band carried a 47.5% probability, followed by 40.6% for 4%-4.25%. Neither band accounted for more than half the distribution.
A 4.50%-4.75% range carried a 6.9% probability, while the current 3.75%-4% band had 3.6%. The lower ranges of 3.50%-3.75% and 3.25%-3.50% carried probabilities of 1% and 0.3%, respectively.
The highest January band, 4.75%-5%, carried a 0.2% probability. The implied expected upper end of the target range was 4.39%, compared with December's 4.26%.
Further out, the March 17, 2027, distribution put the largest probability, 40.6%, on 4.25%-4.50%. The next-largest share was 30.3% for 4.50%-4.75%, followed by 18.8% for 4%-4.25%.
The March distribution assigned 4.7% to 4.75%-5% and 4.1% to the current 3.75%-4% range. It assigned 1% to 3.50%-3.75%, with 0.2% each for 3.25%-3.50% and 5%-5.25%.
The implied expected upper end for March was 4.52%. Each meeting's five underlying choices are a half-point cut, a quarter-point cut, no change, a quarter-point increase or a half-point increase.
