The Federal Reserve has not touched interest rates since late 2025. Markets think that streak is going to continue for a while longer.
As of mid-2026, prediction markets are pricing in roughly a 76.5% probability that the Fed makes zero cuts this year, according to Kalshi. The implied odds of even a single 25 basis point cut sit at just 19.8%.
The federal funds target range has been parked at 3.5% to 3.75% since late 2025. The Federal Open Market Committee has held rates steady through multiple consecutive meetings, and the latest FOMC projections put the median rate at 3.8% by the end of 2026.
Why the Fed is in no rush
Consumer spending has remained resilient, feeding the inflation the Fed is trying to cool. The Consumer Price Index recorded a 4.2% year-on-year increase in May 2026, driven in part by energy costs pushed higher by ongoing geopolitical tensions in the Middle East.
