Will the Fed’s lower bound reach 0.75% or lower before 2027?

The market indicates a low probability of the Fed's lower bound reaching 0.75% or lower before 2027.

With a market probability of 7.40% for a YES outcome, participants largely believe the Fed's lower bound will remain above 0.75% until 2027. The Pulse AI probability aligns closely, suggesting a consensus that current economic conditions will not favor such a decrease in rates.

• 1 Current sentiment leans heavily towards NO on rate cuts.
• 2 Market pricing suggests confidence in the Fed maintaining higher rates.
• 3 Historical trends show the Fed rarely lowers rates significantly in stable conditions.
• 4 Liquidity appears adequate, with no immediate pressure on market dynamics.
• 5 Time to expiry allows for potential economic shifts, but confidence remains moderate.

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.