Fed Holds Rates Again — Kalshi Odds on 2026 Cuts Shift

– The Federal Reserve voted 11-1 to hold rates at 3.5%–3.75% in March 2026, raising its inflation outlook for the year.

– Kalshi’s KXRATECUT-26DEC31 contract last traded at 78 cents, meaning traders see roughly a 78% chance of at least one cut by year-end.

– Watch the Fed’s next meeting and upcoming PCE inflation data, which could push that probability higher or lower.

📈 Predict it here on Kalshi →

What Happened

The Federal Reserve voted 11-1 at its March 2026 meeting to hold its benchmark interest rate steady at 3.5% to 3.75%. The hold follows three consecutive quarter-point cuts in late 2025 and a pause in January 2026. The Fed also revised its inflation forecast upward, now expecting its preferred PCE gauge to hit 2.7% by December 2026, compared to its earlier 2.4% estimate — a sign policymakers aren’t confident inflation is fully tamed.

The Market

KXRATECUT-26DEC31 covers whether the Fed cuts at least once before the end of 2026. It last traded at 78 cents, implying roughly a 78% chance that happens — a figure that stands in sharp contrast to the Fed’s own dot plot, where about 37% of officials (seven of 19) expect no cuts at all in 2026, underscoring a significant divergence between market expectations and policymakers’ own projections. Even with the Fed pausing and warning on inflation, most traders still expect relief before year-end. While the majority of traders still expect rates to continue their downward trajectory, the 32% probability reflected in that contract suggests a notable minority is pricing in the possibility of a reversal above 4%, indicating that market uncertainty extends beyond just the pace of cuts to the very direction of rates themselves. Traders aren’t pricing in a reversal — just a slower path down.

What to Watch

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This is market commentary, not financial advice. Always verify contract terms and do your own research before placing any trades.

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