Fed rate cut by December 2026 meeting?

As of September 1, 2026, Polymarket prices “Fed rate cut by December 2026 meeting?” at 8% YES with $317K traded. No tracked wallet holds a position on this market, so there is no verdict.

Prediction markets put the probability at 10%: Fed rate cut by December 2026 meeting. Currently, markets see this as unlikely (10% YES). The central bank kept the federal-funds rate unchanged in today’s meeting, which surprised no one.

What’s Happening

The probability of a Fed rate cut by December 2026 meeting has collapsed to just 10% YES, reflecting a dramatic reversal from earlier market expectations. As of July 29, 2026, the Federal Open Market Committee voted 9-3 to hold the federal funds rate steady at 3.50%-3.75% for the fifth consecutive meeting, keeping the benchmark at its lowest level since November 2022 [Advisor Perspectives, Jul 29]. This prolonged pause follows a cumulative 1.75 percentage points of cuts delivered between September 2024 and December 2025, with the last reduction occurring in December 2025. The bond market now prices in two 25-basis-point hikes for 2026, not cuts, signaling a complete repricing of the Fed's trajectory under incoming leadership [Morningstar, Apr 29].

The shift began in earnest by March 23, 2026, when CME FedWatch data showed a 74% probability that rates would remain unchanged through the December 2026 meeting — a stark contrast to January, when investors placed just 5% odds on such an outcome and expected at least two or three cuts [Business Insider, Mar 23]. The catalyst was a stronger-than-expected US labor market, which prompted Goldman Sachs economists to scrap their forecast for a December 2026 cut, pushing two quarter-point reductions to June and December 2027 instead [Fortune, Jun 07]. Inflation running above target has further cemented the view that the Fed under incoming Chair Kevin Warsh will need to tighten policy, not loosen it, to contain price pressures.

The current 10% YES probability for a Fed rate cut by December 2026 meeting reflects a market that has fully internalized the hawkish pivot. At the January 28, 2026 meeting, two of twelve FOMC members dissented in favor of a quarter-point cut, but by July the dissent count had shifted to three members preferring a hold — with Stephen Miran remaining the lone perennial advocate for easing [JPMorgan, Aug 21]. The key question now is whether the Fed will be forced to raise rates before year-end, as bond market selloffs and recalibrated wagers suggest growing confidence in hikes. With the labor market remaining resilient and CPI still above the 2% target, the path to any cut before December 2026 appears increasingly narrow, barring a sharp economic downturn or unexpected disinflation [Morningstar, Apr 29].

Traded on Polymarket — $317K Volume