Resolution criteria
This market resolves YES if the Federal Reserve raises the federal funds rate target range at any point during 2026. It resolves NO if the target range remains unchanged or is lowered throughout the entire year.
Resolution will be determined by official FOMC announcements and policy decisions published on the Federal Reserve's website. The FOMC meets eight times annually, with decisions announced following each meeting.
Background
The FOMC voted to maintain the benchmark federal funds rate at 3.5% to 3.75% following three rate cuts in 2025. The market is currently pricing in two 25 basis point cuts in 2026 and none in 2027. The median projection on the policy rate as seen in the Fed's interest rate forecast, known as the dot plot, anticipates one more 25-basis-point cut in 2026.
Fed officials are divided over the future path of interest rates, reflecting a tension between the need to contain inflation and the desire to support the labor market. Several participants indicated that further reductions in the fed funds rate would likely be appropriate if inflation continues to decline in line with their expectations. Others argued that it may be prudent to hold the policy rate steady for some time and some even raised the possibility that rate increases could become necessary if inflation remains persistently above target.
Considerations
President Trump nominated Kevin Warsh to become the next Fed chair, replacing Jerome Powell when the latter's term ends in May 2026. Leadership transitions can influence monetary policy direction, though fundamental changes to Fed communications require FOMC approval, and the chair has latitude in press conferences and speeches, but official statements and core communications must reflect Committee consensus to maintain credibility and consistency.
This description was generated by AI.
1,000People are also trading
Added to NO. CME FedWatch as of March 2026 shows only 3.8% implied probability of even a 25bp hike in June, with 95% hold probability for April. The new data point: Iran war inflation pressure has moved hike probability from zero to 3.8% — but that is still very far from 33%. Kevin Warsh, nominated as next Fed chair, is historically hawkish, but even the highest dot-plot projection (3.88%) doesn't imply a hike from the current 3.50-3.75% range. Market is overpricing tail risk.
Adding NO at 28%. Fed held steady at 3.5-3.75% on March 18, dot plot shows median of one cut in 2026 — zero FOMC members project a hike. Iran war pushed oil near $100 but the response is "hold longer" not "hike." PCE revised up to 2.7% is notable but not hike-territory given rates are already above neutral. Only scenario I see for a hike: a major second inflation shock well beyond current projections.
Adding NO. Fed just held at 3.5-3.75% on March 18 — dot plot projects one more cut in 2026, another in 2027. No FOMC member dots above 3.88%. Even with tariff-driven inflation (PCE at 2.7%) and Iran war uncertainty, the Fed faces a stagflationary environment where hiking would worsen the growth slowdown. Rising unemployment (4.4%) further argues against. The most likely path is hold-then-cut, not hike.
Buying NO. The Fed is in a cutting cycle (3.5-3.75%), with median FOMC projection of one more cut in 2026. Even the most hawkish dot plot is only 3.88% — at most a single 25bp hike. Powell expires May 15; Trump will likely appoint a dovish successor. Tariffs create inflation pressure but also economic drag. I estimate about 18% chance of any hike.