Prediction market participants on Kalshi are now pricing in a 54% probability that the Federal Reserve will raise interest rates at least once in 2026, marking a sharp reversal from the prevailing expectation of cuts or holds earlier in the year.
The shift in sentiment follows the release of Wednesday’s FOMC minutes, which revealed a deeply divided committee on the appropriate path for monetary policy.
The move above 50% indicates that the market is now treating a tightening scenario as the base case, rather than a tail risk.
While some policymakers argued for maintaining the current stance, others expressed concern that rates might be too low given persistent inflationary pressures, leaving the market without a clear directional signal from the central bank.
This repricing represents a significant change in the risk landscape for fixed-income investors.
Just days prior, the probability of a hike had been hovering below the 50% threshold, with many traders still anchored to a narrative of easing or stability.
The move above 50% indicates that the market is now treating a tightening scenario as the base case, rather than a tail risk.