Will the Fed’s lower bound reach 1.5% or lower before 2027?

The market predicts a low chance of the Fed's lower bound reaching 1.5% by 2027.

With a market probability of 8% for a YES outcome and a Pulse AI probability of 11.5%, the consensus leans heavily towards NO. The edge of 3.5 suggests that the market is fairly priced, indicating a moderate level of confidence in the NO outcome.

• 1 Current market sentiment heavily favors a NO outcome.
• 2 Key factors include economic stability and inflation trends.
• 3 Historical data shows low likelihood of such a rate drop.
• 4 Liquidity in the market appears stable with clear pricing.
• 5 Time pressure is moderate with over 6000 hours until expiry.

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.