Will the upper bound of the target federal funds rate be 4.25% at the end of 2026?

As of November 3, 2026, Polymarket prices “Will the upper bound of the target federal funds rate be 4.25% at the end of 2026?” at 67% YES with $586K traded. No tracked wallet holds a position on this market, so there is no verdict.

The Fed dot plot projects a target range whose upper bound sits below 4.25% by end-2026, though traders price 72% odds of that outcome.

What’s Happening

The Federal Reserve raised the effective federal funds rate by 25 basis points to a range of 3.75% to 4.00% at its September 16, 2026 meeting, according to market coverage of the decision. The move followed a seven-month pause since the December 11, 2025 cut and marked a reversal from the three quarter-point reductions implemented over the prior year, which had taken the range from 4.5% down to 3.75%. The September Fed dot plot now projects a target range of 4.00% to 4.25% at yearend 2026, implying one-half point of additional tightening this year, a sharp pivot from the March projection that had anticipated one-half point of rate cuts across 2026 and 2027. [Bondsavvy, Sep 17]

The shift in the policy outlook reflects persistent energy prices and above-target inflation that have moved the committee's centre of gravity toward a higher-for-longer stance. ABN AMRO said it expects a 25bp hike at the September meeting followed by an additional hike in December, taking the upper bound of the target for the federal funds rate to 4.25%, with rate cuts not anticipated until around the end of next year as falling inflation and moderate growth take hold. The question of whether the upper bound of the target federal funds rate will be 4.25% at the end of 2026 now hinges on the December FOMC decision, with the dot plot's 2027 projections also drawing scrutiny for signals on the eventual easing path. [ABN AMRO, Sep 15]

Market-implied odds of one additional rate hike this year jumped to 48% following the September decision, while the probability of the Fed standing pat for the remainder of the year stood at 21% and the chance of the upper bound reaching at least 4.5% was slightly lower. The trajectory contrasts with the July 1 reading, when the upper bound sat at 3.75%, unchanged for roughly seven months, and total easing over the prior twelve months amounted to 75 basis points. Attention now turns to upcoming CPI and employment data, which will inform whether the December meeting delivers the second hike needed to bring the upper bound of the target federal funds rate to 4.25% by yearend. [Igamingbusiness, Sep 16]

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