How many Fed rate cuts in 2026?

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Market context

The Federal Reserve's 2026 rate-cut trajectory hinges on inflation persistence and labour-market resilience. The Fed currently holds rates in the 4.25–4.50% range following cuts begun in September 2024. Markets are pricing in a median of three cuts next year, though the actual number depends heavily on whether core inflation remains sticky above the 2% target or whether economic slack widens unexpectedly. Each 25 basis-point reduction counts as one cut for settlement purposes; larger moves are disaggregated accordingly.

Historical precedent suggests caution about assuming steady-state cuts. In 2023, the Fed cut rates eight times after a banking crisis shock, whilst in 2022 it raised rates aggressively without pause. The 69% crowd probability for "yes" on this market reflects genuine uncertainty: traders are essentially betting that at least one cut occurs, a low bar given current consensus, yet the distribution across 2–4 cuts remains contested. The 2019 cycle, when the Fed cut three times amid trade tensions and inverted yield curves, offers a comparable template for moderate easing without recession.

Watch the January and March FOMC meetings closely, as forward guidance on inflation and employment will reset market expectations sharply. The December 2025 jobs report, released in early January, will be the first major data point of the year. Any surprise weakness in payrolls or a drop in core PCE inflation could accelerate cut pricing; conversely, sticky wage growth or a resilient labour market would push traders toward fewer cuts. Emergency cuts outside scheduled meetings remain a tail risk but would only materialise if financial conditions deteriorated materially.

Methodology

This page is a comparison snapshot: one live quote (Polymarket), four reference venues with their key attributes, and a single execution path — every trade button routes to Polymarket Klarna UK, which mirrors the Polymarket order book directly.

Resolution & payout

At resolution the UMA oracle takes over: a proposer posts the outcome with a bond, any token holder can dispute within two hours. Without dispute the result is accepted and the smart contract distributes USDC instantly.

On Kalshi (CFTC-regulated) resolution runs through their in-house clearing engine in USD. Betfair Exchange settles after match end in the account's local currency. Manifold pays no cash — only its in-platform "mana" currency.

FAQ

Where can I trade this market with the lowest fees?

On Polymarket Klarna UK, which mirrors the Polymarket order book at 0% fees. Kalshi charges up to 7% per trade; Betfair Exchange takes 2-5% commission on net winnings.

What does it cost to trade on Polymarket Klarna UK?

Zero. Polymarket Klarna UK routes every order to the live Polymarket order book; the only cost is the Polygon network fee, typically under $0.01 per transaction.

How fast are USDC deposits?

Polygon credits deposits after 12 confirmations — usually under 30 seconds. Withdrawals follow the same path and land back in your wallet within minutes.

Do I need to KYC for this market?

Not under $1,500 of lifetime trading volume. Above that threshold, Polymarket Klarna UK triggers a quick verification flow that finishes in minutes.

How reliable are the quoted odds?

The YES/NO percentages are the live mid-prices of the Polymarket order book. On deep markets they move every few seconds; on thinner ones you'll see short plateaus.