Prediction markets on Kalshi currently price a 36 percent probability that the Federal Reserve will raise the federal funds rate by more than 25 basis points at its December 2027 meeting, down 29 percentage points in the past 24 hours. The sharp decline reflects a widening gap between near-term hawkish repricing in futures markets and longer-term consensus expectations that the Fed will deliver standard quarter-point cuts rather than an outsized hike at year-end 2027.
Goldman Sachs Research now projects the first Fed rate cuts of this cycle in June 2027 and December 2027, each a 25-basis-point reduction that would bring the target federal funds range down to 3.0–3.25 percent from the current 3.5–3.75 percent. A Bloomberg survey of 35 economists reported a median forecast aligned with that same June and December 2027 easing path, reinforcing the view that the central bank will be loosening rather than tightening policy at the end of next year. J.P. Morgan Global Research expects the Fed to stay on hold through 2026 and then deliver a single 25-basis-point hike in September 2027, with no explicit forecast of a larger move in December.
Meanwhile, CME Group's FedWatch Tool and commentary from The Kobeissi Letter show that futures markets have recently repriced toward hikes in late 2026 and early 2027, with a 51 percent probability of a hike by March 2027 following a recent inflation surge. Those signals focus on the timing and direction of the next move rather than the magnitude of any December 2027 action, leaving the Kalshi contract's 36 percent odds as a bet on either a substantial upside surprise in inflation or a shift away from the Fed's typical 25-basis-point increment pattern.
The Kalshi market closes on December 8, 2027, at 18:59 UTC, and has seen $40 in trading volume over the past 24 hours. A greater-than-25-basis-point hike would mark a departure from the measured pace seen in recent cycles, requiring either persistent inflation that forces an aggressive policy response or a regime change at the Fed that breaks from the quarter-point convention favored by Chair Jerome Powell and his predecessors.
