On Polymarket, the market for How many Fed rate cuts in 2026 shows the 0 (0 bps) outcome trading at around 38-40% probability, with roughly $14 million in trading volume.
The next most likely outcomes are: 1 cut (25 bps) at ~25-26%. 2 cuts (50 bps) at ~18%. 3 cuts (75 bps) at ~10%. This implies the crowd currently assigns about a 60-62% chance of at least one cut during the year, but zero cuts is the single most probable discrete outcome and has been rising recently.
Why the Spike in No Cuts Odds?
This shift aligns with recent developments: The Fed’s March 2026 dot plot still shows a median projection of one 25 bps cut in 2026, targeting a ~3.4% federal funds rate by year-end; current target range: 3.50%-3.75%. However, the distribution of individual projections has tightened, with more officials clustering around modest or no easing.
Hotter-than-expected inflation data and geopolitical and oil price pressures have pushed up near-term inflation forecasts; Fed now sees 2.7% PCE for 2026. This reduces room for cuts without risking reacceleration. Short-term markets show very high odds of no change at upcoming FOMC meetings. Traders appear to be pushing expected first cuts later into the year—or off the table entirely if data stays resilient.
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Polymarket’s no cuts probability has climbed notably in recent weeks amid these factors, reflecting a higher for longer repricing: ~25% chance of a Fed rate hike rather than cut somewhere in 2026; ~35% chance the rate ends 2026 at 3.75% with no net change. This is a crowd-sourced prediction market, so prices can swing fast on new data, FOMC signals, or macro shocks.
It’s not a forecast from the Fed itself—the official dot plot still leans toward one cut, but officials have emphasized data-dependence and patience. Prediction markets like this often incorporate nuances that traditional surveys or futures curves lag on. If inflation cools more than expected or growth softens, the zero-cuts probability could drop quickly; persistent upside surprises in prices would push it higher.
Worth watching the April FOMC and upcoming inflation/labor reports for the next moves in these odds. The Fed dot plot is a key part of the Federal Open Market Committee’s (FOMC) Summary of Economic Projections (SEP), released four times a year alongside certain FOMC meetings. It visually represents where each of the up to 19 FOMC participants expects the federal funds rate to be at the end of the current year, the next two years, and in the longer run.
Each participant’s view is shown as a single dot on a chart for each time horizon. The dots reflect what that individual believes is the appropriate policy path to achieve the Fed’s dual mandate of maximum employment and 2% price stability, based on their own economic outlook and assumptions at the time.
The middle value when all dots are ordered from lowest to highest. Markets and analysts focus heavily on this as the consensus signal. Central tendency: Excludes the three highest and three lowest projections to show the cluster without outliers. Full range shows the spread of all individual views, highlighting disagreement or uncertainty.
Dots are plotted as the midpoint of the participant’s expected target range for the federal funds rate at year-end. The dot plot is not a commitment or official Fed forecast—it’s the aggregation of individual, anonymous views that can shift with new data. It often influences market pricing for future rate moves. As of the March meeting, the current federal funds target range remains 3.50%–3.75%.
Median projections for the federal funds rate. End of 2026: 3.4%; implies roughly one 25 basis point cut from current levels during the year; unchanged from December 2025 projection. End of 2027: 3.1% another ~25 bp cut; unchanged. End of 2028: 3.1% stable thereafter. Longer run: 3.1% slightly up from 3.0% in December; this is viewed as the rate consistent with a balanced economy over time.
This median path still points to modest easing; total of about 50 bp cuts over 2026–2027, but the distribution tightened notably for end of 2026, 14 dots clustered in the 3.25%–3.75% area suggesting 0 or 1 cut for most participants. Roughly 7 participants saw rates at or above ~3.375%–3.50%, while only 5 saw lower levels.
Compared to December, the spread narrowed, with fewer aggressive cutters and more officials leaning toward higher for longer amid resilient growth and sticky inflation. This tightening helps explain why prediction markets like Polymarket have seen 0 cuts in 2026 probabilities rise sharply.
The dot plot’s median still shows one cut, but the balance of views has shifted hawkishly, reducing confidence in even modest easing. The dot plot is paired with forecasts for other key variables: In 2026, 2.4% up from 2.3% in December. Longer run is projected at 2.0% up from 1.8%; reflects optimism around productivity.
These revisions reflect hotter recent inflation data and energy price pressures, while growth held up or improved slightly. Risks to inflation were seen as tilted to the upside by most participants. A stable or hawkish-leaning dot plot can push back against market expectations for aggressive cuts, contributing to repricing in bonds, stocks, and prediction markets.
Chair Powell has emphasized that policy will react to incoming data on inflation, labor markets, and growth. Geopolitical uncertainty adds volatility. Projections assume each participant’s view of appropriate policy. They can change quickly with new information. The plot doesn’t specify when during the year cuts might occur, only year-end levels.