How Many Fed Rate Cuts in 2026?: Odds & Probability

The market aggregates expectations on how many 25-basis-point cuts the Federal Reserve will deliver in 2026. Each full quarter-point reduction counts as one cut—so a 50 bps move would tally as two. The definition also captures smaller moves, with any reduction of 1–24 bps registering as a single cut. Emergency actions outside the regular FOMC schedule are included, and the market stays open until 11:59 PM ET on December 31, 2026, to accommodate last‑minute surprises. Total volume in the market exceeds $42 million, suggesting deep conviction behind the probabilities. The 80.3% reading for “no cuts” is the dominant signal: traders assign only a 13.5% chance to any single cut and see multiple cuts as outliers. After the 13.5% assigned to one cut, the figures drop quickly—3.9% for two, 1.8% for three, and fractions of a percent for four or five cuts. Even the long tail of “12 or more cuts” sits at 0.4%, comparable to the odds for five, six, seven, or eight cuts individually. That cluster of low‑probability outcomes points to a market that acknowledges extreme scenarios but isn’t pricing them with any conviction. The structure of the contract means some outcomes will resolve early to “No” if the count becomes mathematically impossible. For instance, if four cuts have already occurred by mid‑year, the “no cuts” and “one cut” contracts would be voided. By staying open through the end of 2026, the market also absorbs any unscheduled easing—an important design feature given that past easing cycles have sometimes begun outside regular meetings. The resolution source is official: FOMC statements after each scheduled meeting and the published target federal funds rate on the Fed’s website. With the calendar set through December 2026, the market offers a real‑time gauge of how professionals interpret the economic outlook. At present, the overwhelming message is that rates stay where they are.