How many Fed rate cuts in 2026?

According to the latest prediction market data for the query “How many Fed rate cuts in 2026?”, traders have formed a strong consensus.

Currently, 0 (0 bps) is dominating the market with an overwhelming 78.1% chance of winning. 1 (25 bps) follows in second place at 12.5%, while 3 (75 bps) sits in third with 3.5%. The betting volume for this specific market has already reached $39.9M, reflecting intense industry interest.

To better assess where each potential outcome stands, the market can be segmented into three distinct trading tiers based on implied probability and contract pricing:

🥇 Tier 1: The Dominant Leader

• 0 (0 bps) (78.1%): Currently commanding the highest probability, 0 (0 bps) is heavily favored by the order book. Traders looking to back this outcome face a “Buy Yes” contract price of 78¢, signaling a high degree of market conviction. This contract alone has generated $5.7M in volume.

🥈 Tier 2: The Primary Challengers

• 1 (25 bps) (12.5%): Positioned as the most viable alternative, 1 (25 bps) maintains a 12.5% chance of resolving true. Its “Buy Yes” shares currently trade at 13¢.
• 3 (75 bps) (3.5%): Sitting in third place with a 3.5% probability, the market shows measured skepticism toward 3 (75 bps), treating it as an outside wildcard unless momentum shifts.

🥉 Tier 3: The Long-Tail Options (Combining for ~5.9%)

Beyond the top three choices, a wide field of macro variables and long-shot outcomes are being tracked. While their individual probabilities hover low, they represent crucial hedges for speculative traders:

• Alternative Options: This includes 2 (50 bps) (3.2%), 4 (100 bps) (0.6%), and 5 (125 bps) (0.4%).
• Speculative Volume: Despite low statistical likelihood, certain long-tail contracts like 12+ (300+ bps) are still attracting notable interest.

This market will resolve according to the exact amount of cuts of 25 basis points in 2026 by the Fed (including any cuts made during the December meeting).

Emergency rate cuts outside of scheduled FOMC meetings will also count toward the total number of cuts in 2026. This market will remain open until December 31, 2026, 11:59 PM ET, to account for any such emergency actions.

For example, if the Fed cuts rates by 50 bps after a meeting, it would be considered 2 cuts (of 25 bps each).

This market will resolve early to "No" if the specified number of cuts becomes impossible — i.e., if more cuts have already occurred than the strike in question.

Note that cuts between 1–24 bps (inclusive) will also be considered 1 rate cut.

The resolution source for this market will be FOMC statements after meetings scheduled in 2026 according to the official calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm. The level and change of the target federal funds rate is also published at the official website of the Federal Reserve at https://www.federalreserve.gov/monetarypolicy/openmarket.htm.

While human consensus and speculative volume shape the broader prediction market, our quantitative algorithms offer a data-driven counter-perspective. By analyzing fundamental signals, underlying trends and historical distributions, our AI Valuation model calculates an independent “Fair Value” probability for each outcome.

Comparing this Fair Value against the current Trade Value uncovers major disparities — known as the Expected Value (EV) Gap. Contracts with a positive EV Gap represent statistically underpriced outcomes, whereas a negative EV Gap flags a potential market overreaction.

Top AI Alpha & Mispriced Arbitrage Opportunities

Based on the latest data model run, several key contracts stand out with significant deviations:

• The Most Overvalued Outcome 0 (0 bps) currently trades at 78.1%, but our AI places its Fair Value at just 62.9%. This creates a large negative EV Gap of -15.2%, suggesting the crowd may be overhyping this outcome and driving the premium too high.
• The Best Value Play (Highest EV) Our model identifies 6 (150 bps) as the premium value opportunity on the board. While the market only assigns it a 0.3% trading probability, our AI’s Fair Value assessment sits at 27.5% — yielding an impressive +27.2% EV Gap.
• Under-the-Radar Dark Horses Other notable discrepancies include 8 (200 bps) (EV Gap: +18.2%) and 9 (225 bps) (EV Gap: +12.6%). These long-tail opportunities are heavily discounted by the live order books despite stronger statistical backing from our predictive model.