Kalshi traders are pricing a 32 percent probability that the Federal Reserve will raise its benchmark rate by 25 basis points at the December 2027 FOMC meeting, down 45 percentage points in the past 24 hours. The sharp decline suggests investors are reassessing the likelihood of a renewed hiking cycle after the central bank cut rates three consecutive times in 2025, bringing the federal funds target range to 3.5–3.75 percent.
The Fed's own December 2025 Summary of Economic Projections envisioned only 50 basis points of additional cuts across 2026 and 2027 combined, implying a gradual drift toward a long-run neutral rate estimated at 3.0 percent. Minutes from the January 28–29, 2026 FOMC meeting show the Committee held rates steady at 3.5–3.75 percent with two members dissenting in favor of a cut, and market-based expectations at that time pointed to one or two additional 25 basis point reductions over the course of 2026. Those projections left little room for a return to tightening by late 2027 under the baseline scenario.
Yet at least one major forecaster has broken from the consensus. J.P. Morgan Global Research expects the Fed to remain on hold through the end of 2026 and then deliver its first new 25 basis point hike in September 2027, citing the risk that inflation or growth surprises could force policymakers back into a tightening stance. That call would make a December 2027 hike plausible if the macro data cooperate, though the recent collapse in Kalshi odds suggests traders now see a milder inflation path or more persistent growth headwinds than previously feared.
The contract closes on December 8, 2027, at 18:59 UTC, just hours after the scheduled FOMC announcement. With 17 months still separating today's pricing from the decision date, the market remains highly sensitive to incoming employment, inflation, and GDP prints that will shape the Fed's reaction function over the next year and a half.
