As of September 2, 2026, Polymarket prices “Will the Fed increase interest rates by 25 bps after the December 2026 meeting?” at 74% YES with $743K traded. 2 tracked wallets hold a position here; the dominant side is NO.
Prediction markets put the probability at 44%: Will the Fed increase interest rates by 25 bps after the December 2026 meeting. Currently, markets are divided (44% YES, 56% NO).
Trading on Polymarket shows a **44% probability** that the Federal Reserve will increase interest rates by 25 basis points after the December 2026 meeting, against a **56%** chance of no move. This contrasts sharply with the central bank's own guidance from **January 2026**, when RBC Economics projected the fed funds rate would remain pinned at **3.5%-3.75%** for the entire year following a single 25-bps cut in December 2025. The shift in market pricing reflects a dramatic reversal from the easing bias that dominated Fed communications through late 2025, when Chair Jerome Powell characterized the December cut as a "close call" and emphasized labor market weakness as the primary justification for policy loosening [RBC, Jan 14].
The probability of the Fed increase interest rates by 25 bps after the December meeting has been driven by inflation dynamics tied to the **Iran war**, which began escalating in **April 2026**. According to Business Insider, odds of a hike at least 25 basis points surged on **Monday, May 5**, following Powell's post-meeting warning on **April 29** that prices could "go much higher" the longer the conflict persists. The CME FedWatch tool simultaneously showed tumbling odds for any rate cut through the remainder of 2026, a stark reversal from **December 10, 2025**, when FactSet surveys indicated a **62% probability** the Fed would hold steady at its January meeting and markets priced in only one 25-bps cut for all of 2026 [Business Insider, May 5].
Historical precedent suggests that when the Fed pivots from easing to tightening, it typically follows a sustained inflation shock rather than a single data point. The **December 2026 meeting** is scheduled for **December 9**, according to the active Polymarket contract, which has drawn **$5,500** in volume. Reuters reported on **December 10, 2025** that Powell explicitly stated the Fed sees "only one rate cut in 2026; no hike ahead," yet that projection was made before the Iran conflict disrupted energy markets. Key indicators to watch include the **August 2026 CPI** report, due in mid-September, and the **September 2026 employment situation** summary from the BLS. Goldman Sachs has noted that core inflation excluding food and energy will be the decisive variable, with tariffs and supply-chain disruptions potentially forcing the Fed to abandon its "neutral stance" guidance and implement the first hike since **July 2023** [Reuters, Dec 10].
See which tracked wallets hold this market (entries, size, P&L), the models’ fair value and entry targets — and get an alert within a minute when they trade.
Unlock PRO — $29/moMajority of models lean NO, but not unanimous. BUY NO at 74c — models see 36c of upside.
| Model | Says | Fair Value estimated fair price | Confidence |
|---|---|---|---|
| MATH PIN Model | YES | 98c | — |
| AI Claude Analysis | ??? | 55c | 38% |
| AI DeepSeek Quant | NO | 58c | 62% |
| AI Grok Contrarian | NO | 72c | 61% |
| AI Gemini Flash | NO | 54c | 65% |
| AI Kimi Macro | NO | 65c | 72% |
4 of 6 models estimate NO fair value above market (54–72c vs 26c). Kimi Macro leads with 72% confidence.
Models estimate fair value of NO at 62c — market prices it at 26c. 36-point gap supports NO.
Only two wallets are tracked, with the YES side showing entries at 59c and the NO side at 32c, meaning the NO wallet is the dominant side by position but is currently losing. The NO entry at 32c implies a trader who expected a much lower probability of a hike and is now exposed to a 42c adverse move. With such a thin sample, the YES entries at 59c signal early conviction that has been validated by the market's repricing to 74c.
| Wallet | Category | Side | Amount | P&L | |
|---|---|---|---|---|---|
| 0xeb6f..f0 | MM | YES | $5.5K | +26% | |
| 0xa4b3..b8 | Retail | NO | $1.6K | -21% |
Both YES positions entered at 59c are in profit against the current 74c price, while the NO entry at 32c is underwater. The profitable YES cohort has no incentive to sell into strength, which supports the 74c level by removing near-term supply. The losing NO side faces pressure to cover if the price holds, adding further upward support.
Polymarket prices YES at 74c with $743K in total volume. Our model estimates fair value at 38c. Significant 36-point gap — model sees NO as substantially mispriced.
| Platform | YES Price | Volume |
|---|---|---|
| Polymarket | 74c | $743K |
| Our Model | 38c | — |