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How many Fed rate cuts in 2026 Odds & Analysis

What the market prices with two meetings left

How many Fed rate cuts will happen in 2026? As of late October 2026, prediction markets have all but closed the question: zero cuts trades at 96.9%, exactly one cut at 1.35%, two cuts at 0.35%, and every bucket from three cuts upward at 0.25% or less. The event has drawn roughly $55 million in volume, and each count trades as a separate contract that PredMart supports with leverage. The reason for the lopsided board is simple: instead of easing, the Fed raised rates by 25 basis points on September 16, and the market on whether the Fed would hike at all in 2026 has already resolved Yes.

What remains to be priced is not direction but residual risk. Only two scheduled decisions are left, October 28 and December 9, and the contract stays open through December 31 so that any emergency cut would also count. The roughly 3 cents of probability spread across the cutting buckets is the market's estimate that a labor-market break or a financial shock forces the Fed to reverse a hiking cycle within weeks of starting it. This article walks through how the board got here, what each bucket implies, and which dated catalysts could still move it.

The front-runner: zero cuts at 96.9%

Zero cuts sits at 96.9%, quoted roughly 96.6 bid and 97.2 ask, and has barely moved over the past month. It traded near 43% in February and 81% in June, so most of the repricing happened over the summer. The path was a sequence of hawkish steps: the Fed held in July, Chair Kevin Warsh struck a hawkish tone at Jackson Hole in late August, and on September 16 the committee voted 12-0 to lift the target range to 3.75%-4.00%, its first increase since 2023, as CNBC and Schwab reported. The September projections put the median year-end 2026 rate at 4.1%, implying one more hike rather than any cut, and Warsh again declined to submit projections of his own, according to J.P. Morgan Asset Management's review of the statement.

Inflation has kept that bias in place. The Bureau of Labor Statistics reported on October 14 that September CPI rose 0.6% on the month and 3.7% year over year, up from 3.4% in August, with gasoline up 9.1% and accounting for more than half of the monthly gain. Core CPI was calmer at 2.6% year over year, and that is the main counterweight: the overshoot is concentrated in energy tied to Middle East supply disruption rather than spread across the basket.

At 96.9%, the contract pays about 3.2% if it resolves Yes on December 31, roughly 68 days away, or around 17% annualized. That is the price of carrying tail risk: the payoff is small and the loss on a surprise cut would be close to total. With leverage that asymmetry dominates, since a 4x position magnifies a 3-cent gain and a 97-cent loss alike, and a temporary slide toward 90% can force a margin call even if the contract eventually settles Yes.

How the board moved since June

The biggest move of the year belongs to the same contract: a swing of roughly 54 points from about 43% in February to 96.9% now, with about 16 of those points arriving after June. Two things drove the second leg. First, the hike itself turned the debate from whether the Fed would ease into how far it would tighten. Second, guidance moved further from easing: the September median for end-2027 also sits at 4.1%, which removed the cut the June projections had pencilled in for next year.

The one data series pulling the other way is employment. The September jobs report, released October 2, showed payrolls up only 29,000 against forecasts near 90,000, unemployment rising to 4.2%, and July and August revised down by a combined 60,000, according to Fox Business and Bloomberg coverage. Average hourly earnings growth slowed to 3.0%, the weakest since 2021. That is a soft patch rather than a collapse, and the cutting buckets barely reacted, which says the market sees the Fed's reaction function as inflation-first for now.

The meeting-by-meeting pricing is consistent with that reading. Prediction markets give 94.5% to no change on October 28, 4.5% to a 25 basis point hike and about 0.2% to any cut. For December 9 the board tilts toward tightening, with 76.5% on a 25 basis point hike, 19.5% on a hold and about 1% combined on any cut. CME FedWatch data cited in recent coverage tells a similar story: October hike odds jumped above 40% on the day of the CPI release, then faded after Warsh's October 16 remarks, which Bloomberg reported boosted expectations of a hold.

The field: what the cutting buckets are really pricing

Below the favorite, the board is a tail-risk ladder. One cut at 1.35% is the most plausible alternative, and it would most likely require a December cut, or an unscheduled move, after a sharp deterioration in the October and November labor data. Two cuts at 0.35% and three cuts at 0.25% need either a 50 basis point emergency action or cuts at both remaining meetings. Four cuts trades at 0.2%, and each bucket from five through twelve or more sits at 0.05% to 0.1%, essentially the minimum tick.

The base rate for these scenarios is thin. Reversing direction within a quarter of a first hike would be highly unusual, and the clearest precedent for rapid, unscheduled easing, the emergency cuts of March 2020, came in response to a market-wide shock rather than a weak jobs print. That is the honest framing for the cutting buckets: they are less a view on the economy than insurance against a crisis that forces the Fed's hand. A combined 3% or so looks defensible for a two-month window, though the bid-ask spreads on these thin contracts mean the quoted price can overstate how cheaply that insurance can actually be bought or sold.

One structural point matters for anyone holding the tails: a hike does not count against them, but it does not help either. Each additional increase makes a cut before year-end less likely, so a December hike would push zero cuts toward settlement and the cutting buckets toward zero.

Catalysts: the dated windows that remain

The October 27-28 FOMC meeting is the next test, with the statement at 2:00 pm ET on October 28 and Warsh's press conference 30 minutes later. There is no dot plot at this meeting. A cut is priced at well under 1%, so for this market the relevance is guidance: language that keeps a December hike live reinforces zero cuts, while any acknowledgment that labor weakness could alter the path would give the one-cut bucket a modest bid. The minutes follow about three weeks later.

The October jobs report in early November and October CPI on November 10 are the last major data points before the final decision. A second consecutive payroll miss with rising unemployment is the clearest route to a repricing of the tails; another hot headline print driven by gasoline would cement the December hike.

The December 8-9 meeting is the last scheduled decision of 2026 and comes with a full set of projections. With 76.5% priced on a hike, it is the effective resolution point for this market unless an emergency move occurs before December 31.

Outside the calendar, energy prices tied to Middle East supply disruptions remain the variable most likely to move inflation expectations quickly, in either direction, and financial-stability stress is the one scenario that could plausibly produce an unscheduled cut.

Bottom line

The how-many-cuts market has gone from a live debate to a near-settlement. Zero cuts at 96.9% reflects a Fed that hiked in September, projects at least one more increase, and faces headline inflation at 3.7%. The cutting buckets, worth about 3% combined, are best read as crisis insurance over a two-month window rather than a forecast of policy.

The open questions are narrower than they were in June: whether the labor softness that surfaced in September deepens, whether energy-driven inflation fades, and whether the December hike that markets now expect actually arrives. Absent a shock, each passing week erodes the cutting buckets further, and the October 28 statement and November data are the last real chances for the board to move.

For traders who want to express a view on that residual risk, PredMart's margin account offers up to 4x leverage on these contracts, which matters most when sizing a near-certain favorite with thin returns or a small tail position with a binary payoff.

Trade with up to 4x leverage: predmart.com/event/how-many-fed-rate-cuts-in-2026

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