Fed rate cut by December 2026 meeting?

Prediction markets put the probability at 62%: Fed rate cut by December 2026 meeting. Currently, markets are divided (62% YES, 38% NO). Fed rate cut pushed back to late 2026 on war-related inflation risks | Reuters.

What’s Happening

As of late April 2026, prediction market participants assign a 62% probability that the Federal Reserve will implement a rate cut by the December 2026 Federal Open Market Committee (FOMC) meeting, against a 38% chance of no move. This elevated uncertainty follows a Reuters poll of 103 economists conducted April 17-21, which found that a slim majority—56 respondents—now expect the Fed’s benchmark rate to remain in the 3.50%-3.75% range through at least September 2026, delaying any potential cut to late 2026. The shift is driven by war-related energy shocks reigniting inflation, reversing earlier expectations that nearly 70% of economists had for a reduction by September. The probability of a fed rate cut by december meeting has thus become a key barometer for market participants weighing geopolitical risks against monetary policy timelines. [Reuters, Apr 22]

The delayed rate cut outlook is rooted in persistent inflationary pressures, with the U.S. Consumer Price Index (CPI) remaining elevated due to energy price spikes linked to the ongoing conflict with Iran. Fed Chair Jerome Powell acknowledged in the March 2026 FOMC press conference that tariffs and war-related disruptions would “push up overall inflation,” complicating the central bank’s path to easing. The April 29 FOMC meeting is widely expected to hold rates steady, as the Fed balances inflation risks against a cooling labor market. This standoff has pushed the probability of a fed rate cut by december meeting into focus, with traders now pricing in a later, more cautious easing cycle than previously anticipated. [Forbes, Apr 26]

Looking ahead, the key data points to watch include the April CPI release on May 13 and the May employment report due June 5, which will either confirm or challenge the war-driven inflation narrative. The yield curve has flattened as short-term rates remain anchored, while longer-term bonds reflect growth concerns. Political dynamics also loom: President Donald Trump stated in a Fox Business interview that he would not drop the investigation into Powell, adding uncertainty to the Fed’s independence. For the fed rate cut by december meeting to materialize, inflation must show sustained moderation, likely requiring a resolution to the Iran conflict or a sharper economic slowdown. [USA Today, Apr 27]

Traded on Polymarket — $70K Volume

Lower-volume market on Polymarket ($70K). Wider spreads expected — enter with limit orders and be aware of slippage risk. Currently 62c YES.