The Federal Reserve’s target interest rate range carried an 85.9% market probability of reaching 4%-4.25% at its Dec. 9 meeting, according to prices from US prediction exchange Kalshi.
That outcome would put the range 0.25 percentage point above the current level. For Jan. 27, 2027, the largest probability shifts to a further increase, taking the range to 4.25%-4.50%.
Kalshi is a US exchange regulated by the Commodity Futures Trading Commission. The quotes came from its live feed at 00:01:54 UTC on Nov. 13, with reported contract volume of about 10.5 million for the nearest meeting.
These are market prices, not a forecast or a survey. The rate-band distributions combine successive meetings’ prices, starting from the current range, rather than treating each meeting’s possible changes in isolation.
The current federal funds target range, the band the Fed sets for overnight lending between banks, was 3.75%-4% as of Nov. 10, the Federal Reserve Bank of New York said.
For December, Kalshi’s distribution assigned 10.6% to a 4.25%-4.50% range, behind the dominant 4%-4.25% outcome. The current 3.75%-4% range carried 2.5%, while the lower 3.25%-3.50% and 3.50%-3.75% bands each carried 0.5%.
The implied expected upper end of the December target range was 4.26% in Kalshi’s figures. That measure weights the possible upper limits by their probabilities, so it differs from the upper limit of the single most likely band.
For January, Kalshi assigned 55.3% to a 4.25%-4.50% range and 32.4% to 4%-4.25%. A higher 4.50%-4.75% range carried 8.4%, while the current 3.75%-4% range again carried 2.5%.
The remaining January probabilities were 0.9% for 3.50%-3.75%, 0.3% for 4.75%-5%, and 0.2% for 3.25%-3.50%. Kalshi’s implied expected upper end for that meeting was 4.42%, compared with December’s 4.26%.
By March 17, 2027, the two largest probabilities were closer together. Kalshi assigned 39.1% to 4.25%-4.50% and 36.6% to 4.50%-4.75%, with an implied expected upper end of 4.57%.
March’s other probabilities were 14.4% for 4%-4.25%, 5.9% for 4.75%-5%, and 2.8% for the current 3.75%-4% range. The 3.50%-3.75%, 5%-5.25% and 3.25%-3.50% bands carried 0.8%, 0.3% and 0.1%, respectively.
Each meeting’s underlying market prices five possible decisions: cuts of 0.50 or 0.25 percentage point, no change, or increases of 0.25 or 0.50 percentage point. Chaining those probabilities produces the wider set of rate bands shown for later meetings.
