At the start of this year, markets were practically certain the Fed would cut rates before 2027. Over 90% certain, to be precise. That number has since cratered to 32.9% on Kalshi, the regulated prediction market, marking the lowest reading in months and a stark reversal of sentiment that has implications across every asset class, crypto included.
What’s behind the collapse in rate-cut odds
The Federal Reserve is widely expected to hold its target rate at 3.50-3.75% following its April 29, 2026 meeting. What’s notable is the growing consensus that rates will stay parked there for a very long time.
Bank of America and the CME FedWatch Tool both point to less than 50% odds of any rate cut materializing until at least the second half of 2027. Polymarket and Kalshi forecasts are even more blunt for the near term: traders assign 57-97% odds of no change at the June 16-17 FOMC meeting.
The implied probability of a rate hike in 2027 has climbed to 45%. Prediction markets now see it as nearly a coin flip that the Fed’s next move is tightening, not loosening.
