Will no Fed rate hikes happen in 2026?

As of September 3, 2026, Polymarket prices “Will no Fed rate hikes happen in 2026?” at 6% YES with $127K traded. No tracked wallet holds a position on this market, so there is no verdict.

Prediction markets put the probability at 36%: Will no Fed rate hikes happen in 2026. Currently, markets are divided (36% YES, 64% NO).

What’s Happening

Market pricing for a potential Federal Reserve rate hike in September 2026 has fallen to roughly 36%, down from over 70% at the end of July, according to the latest Fed minutes released on August 20, 2026. This sharp reversal in expectations has shifted the probability that no Fed rate hikes happen in 2026 to 36% YES, with traders now assigning a 64% probability that the central bank will raise its benchmark rate before year-end. The federal funds rate currently sits at a range of 3.50% to 3.75%, a level maintained unanimously at both the June and July FOMC meetings under new Chair Kevin Warsh, who has refrained from publishing his own dot-plot projections. [Equiti, Aug 20]

The debate over whether no Fed rate hikes happen in 2026 has intensified following a dramatic shift in the central bank's internal projections. At the June 17, 2026 FOMC meeting, the dot plot revealed that policymakers are split between no cuts for the remainder of the year and one or more quarter-point increases, driven by elevated inflation and rising energy prices linked to the war with Iran. This marks a stark reversal from January 2026, when market observers widely anticipated multiple rate cuts; instead, the consensus has flipped to preparing for higher borrowing costs. The June 2026 Summary of Economic Projections showed a "sea change" in officials' views, with the median policymaker now seeing inflation risks as tilted to the upside, a critical factor for any scenario where no Fed rate hikes happen in 2026. [NYT, Jun 17]

Looking ahead, the probability of a hike remains highly sensitive to incoming inflation data, with the next CPI report and the September 2026 FOMC meeting serving as key catalysts. Warsh has also proposed considering six FOMC meetings per year instead of eight, though no such change will occur in 2026. The July 29, 2026 FOMC statement reinforced that markets now price in "high odds" of a rate hike later this year, with most officials anticipating between one and two increases by December. Historically, when the Fed has shifted from a hold stance to hiking within a single calendar year—as seen in 2004 and 2015—the initial move was followed by a sustained tightening cycle. For the "no hikes" scenario to materialize, inflation would need to cool substantially from current levels, a development not reflected in recent producer price data or the Fed's own forecasts. [US Bank, Jul 29]

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