Resolution criteria

This market resolves YES if the Federal Reserve's federal funds rate target is set to 0.00% (or a range with 0% as the lower bound, such as 0.00%-0.25%) at any point during the tenure of Jerome Powell's successor as Federal Reserve Chair. Resolution will be determined by official announcements from the Federal Reserve Board at https://www.federalreserve.gov/newsevents/. The market resolves NO if the successor's tenure ends without the rate ever reaching 0%.

Background

Powell's term as chair expires in May 2026, and the five candidates on the shortlist are Fed governors Chris Waller and Michelle Bowman, former Fed governor Kevin Warsh, NEC Director Kevin Hassett, and BlackRock head of fixed income Rick Rieder. The Fed has twice lowered the rate to 0.0% to 0.25%—the first time during the financial crisis of 2008, and the second time in March 2020. The Federal Reserve initiated its first rate cut in nearly three years in September 2024, bringing the rate to 5.13 percent, and by December 2024, the rate was cut to 4.48 percent.

Considerations

Zero interest rates are typically deployed only during severe economic crises. The zero lower bound is considered an important milestone in monetary policy because the central bank is typically no longer able to reduce nominal interest rates. Whether Powell's successor cuts to 0% depends heavily on future economic conditions rather than the successor's identity alone.