Polymarket

Polymarket: Traders Overwhelmingly Bet Against Fed Rate Cut in December 2026 Amid Persistent Inflation and Strong Economy

A Polymarket prediction market shows an overwhelming 99.35% probability against a 25 basis point Federal Reserve interest rate cut in December 2026, reflecting widespread expectations of continued monetary tightening or at least a hold, driven by sticky inflation and robust economic indicators.

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— 2 min read

The prediction market on Polymarket, asking "Will the Fed decrease interest rates by 25 bps after the December 2026 meeting?", currently reflects a near-unanimous sentiment against such a move. With current prices showing a 0.0065 probability for "Yes" and 0.9935 for "No", traders are assigning a staggering 99.35% chance that the Federal Reserve will not cut interest rates by 25 basis points following its December 8-9, 2026, Federal Open Market Committee (FOMC) meeting. This market has seen significant activity, with a trading volume exceeding $5.4 million.

This strong market conviction against a rate cut aligns with a broad consensus among financial analysts and other prediction markets, which largely anticipate further rate hikes or, at minimum, a prolonged pause in monetary policy. For instance, other prediction markets like Kalshi show an 86% chance of a 25 basis point hike at the December 2026 meeting, with Polymarket itself indicating probabilities as high as 88.5% for a 25 bps increase and 9.7% for a 50+ bps increase, bringing the combined probability of a hike to over 97% according to recent reports.

Several key economic developments and expert opinions underpin this outlook:

Persistent Inflationary Pressures: Inflation remains a primary concern for the Federal Reserve. Recent data, including October's Consumer Price Index (CPI) report, showed headline consumer prices rising 0.4% month-over-month, exceeding forecasts, and core CPI increasing 0.3% for the third consecutive month. This persistence is reflected in forecasts, with Goldman Sachs expecting Personal Consumption Expenditures (PCE) inflation to hover near 3% through 2026, well above the Fed's 2% target. Fed Chair Jerome Powell has acknowledged that inflation has moved higher, partly due to elevated global energy prices.

Resilient Economy and Labor Market: The U.S. economy has demonstrated remarkable resilience. Real GDP expanded at an annualized rate of 2.0% in the first quarter of 2026, driven by robust investment and consumer spending, bolstered by an AI boom. The labor market also remains strong, with consistent jobs growth and an unemployment rate holding steady in the 4.3–4.4% range. This robust economic activity provides the Fed little incentive to ease monetary policy.

Fed's Current Stance and Projections: The Federal funds target range currently stands at 3.75%-4.00%, following a September 2026 hike and an October 28, 2026, decision to hold rates steady. Influential Fed Governor Christopher Waller has openly supported further tightening, even suggesting a 50 basis point hike if core CPI remained elevated. UBS also expects a 25 basis point rate hike in December 2026, followed by another in March 2027, citing resilient economic growth and robust corporate earnings.

Given these factors, the Polymarket odds strongly imply that market participants foresee the Fed either raising rates further or maintaining the current restrictive stance to combat inflation, rather than initiating a rate-cutting cycle by December 2026.

Sources:

Market data fetched at 2026-11-13 12:16 UTC | Polymarket ID: 3215006

This article is generated by AI for informational purposes only. It does not constitute financial advice. Always do your own research before making any investment decisions. Data sourced from Polymarket and public web sources.

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