Will the Fed’s lower bound reach 0% or lower before 2027?

The market indicates a low probability of the Fed's lower bound reaching 0% before 2027.

With a market probability of 5.50% for a YES outcome and 94.5% for NO, the consensus leans heavily towards the Fed not lowering the lower bound to 0% or below by 2027. The Pulse AI also reflects a similar sentiment, suggesting that the market is fairly priced with a confidence level of 80 out of 100.

• 1 Current market sentiment strongly favors a NO outcome.
• 2 Economic indicators suggest stability, reducing the likelihood of drastic rate cuts.
• 3 Historical trends show the Fed rarely lowers rates to 0% in stable conditions.
• 4 Liquidity in the market appears adequate, supporting current pricing.
• 5 Time to expiry allows for potential economic shifts but remains low probability.

The FED interest rates are defined in this market by the lower or the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings.

This market will resolve to “Yes” if the lower or the upper bound of the target federal funds rate reaches the specified level at any point by December 31, 2026, 12:59 PM ET. Otherwise, this market will resolve to “No.”

Emergency rate cuts and hikes outside the regularly scheduled meetings will be considered.

The resolution source for this market is the official website of the Federal Reserve at:
https://www.federalreserve.gov/monetarypolicy/openmarket.htm.

This market may resolve as soon as the relevant data showing the reached level is published.