The market-priced probability of a Federal Reserve target range of 4%-4.25% at the Dec. 9 meeting stood at 86.1% on Nov. 15, according to US prediction exchange Kalshi.
That range is 25 basis points above the current 3.75%-4% range, which the Federal Reserve Bank of New York reported as of Nov. 12.
Kalshi is a US exchange regulated by the Commodity Futures Trading Commission. The quotes came from a live feed at 16:00:57 UTC on Nov. 15, and contract volume for the December meeting totaled 13.4 million.
The probabilities are market prices, not a forecast or a survey. The rate-band distributions combine the prices of successive meeting outcomes, starting from the current target range.
For December, the 4.25%-4.5% band carried a 9.4% probability, while the current 3.75%-4% band carried 3.5%. The two lower bands, 3.25%-3.5% and 3.5%-3.75%, each carried 0.5%.
The implied expected upper bound of the December target range was 4.26%. That measure refers to the top of the range, rather than its midpoint, and combines the possible outcomes into one probability-weighted figure.
For the Jan. 27, 2027, meeting, the largest probability shifted to the 4.25%-4.5% band, at 53.5%. The 4%-4.25% band followed at 35.5%, while the 4.5%-4.75% band carried 6.7%.
The current 3.75%-4% range had a 2.9% probability for January. The 3.5%-3.75% band carried 1%, followed by 0.2% for 3.25%-3.5% and 0.1% for 4.75%-5%.
The implied expected upper bound for January was 4.40%, compared with December's 4.26%. The most likely January band stood 50 basis points above the current range.
For March 17, 2027, the 4.25%-4.5% band retained the largest probability at 38.9%, followed by 33.8% for 4.5%-4.75%. The 4%-4.25% band carried 16.5%, while 4.75%-5% carried 5.6%.
The current range had a 3.8% probability for March. The remaining probabilities were 0.9% for 3.5%-3.75%, 0.3% for 5%-5.25% and 0.2% for 3.25%-3.5%. March's implied expected upper bound was 4.55%.
Each meeting's underlying market prices five possible decisions: cuts of 50 or 25 basis points, no change, or increases of 25 or 50 basis points. A basis point is one hundredth of a percentage point.
The calculation carries those decision probabilities forward from one meeting to the next to produce the bands shown here. January's distribution therefore incorporates the possible December decisions, and March's incorporates the possible decisions at both earlier meetings.
