The Federal Reserve's target range had a market-priced 69.1% probability of rising to 4%-4.25% at its Dec. 9 meeting, according to quotes from US prediction exchange Kalshi.
That outcome would put the range 25 basis points above its current level. The same band also carried the largest probability for the following meeting, on Jan. 27, 2027.
Kalshi is a US exchange regulated by the Commodity Futures Trading Commission. The live-feed quotes were taken at 20:31:47 UTC on Nov. 1, with December contract volume at about 2.6 million.
These are market prices, not a forecast or a survey. The federal funds target range sets the bounds for the interest rate banks charge each other for overnight loans.
The Federal Reserve Bank of New York put the current target range at 3.75%-4% as of Oct. 29.
For December, Kalshi's distribution assigned a 27.9% probability to the current 3.75%-4% range. A further increase to 4.25%-4.5% carried a 1.5% probability.
Lower December ranges carried smaller probabilities: 1% for 3.5%-3.75% and 0.5% for 3.25%-3.5%. The five bands covered outcomes from half a percentage point below the current range to half a point above it.
The December distribution implied an expected upper limit of 4.17%, compared with the current 4% upper limit. That measure averages the possible upper limits using their respective probabilities.
For January, the probability of a 4%-4.25% range fell to 56.4%, while the current 3.75%-4% band carried 21.2%. The probability of a 4.25%-4.5% range rose to 18.8%.
The remaining January bands carried probabilities of 1.6% for 3.5%-3.75%, 1.4% for 4.5%-4.75% and 0.5% for 3.25%-3.5%. The implied expected upper limit was 4.24%.
By the March 17, 2027, meeting, the two largest probabilities were closer together. The 4%-4.25% band carried 36.8%, followed by 35.2% for 4.25%-4.5%.
The current range carried a March probability of 13.5%, while 4.5%-4.75% carried 10.1%. The implied expected upper limit reached 4.34%.
The other March probabilities were 2.8% for 3.5%-3.75%, 0.9% for 4.75%-5%, 0.6% for 3.25%-3.5% and 0.1% for 3%-3.25%.
Each meeting's market prices five 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 distributions combine those probabilities across successive meetings, starting from the current target range. The later bands therefore reflect the combined paths through earlier decisions, rather than only the size of a change at that meeting.
