Fed decision in Mar 2026?
Short Answer
Both the model and the market expect the Fed to maintain its rate, with no compelling evidence of mispricing.
1. Executive Verdict
- February 2026 Jobs Report is a key Fed rate change driver.
- Weak manufacturing and services PMIs would increase rate change probability.
- Decline in consumer spending could significantly impact Fed decision.
- Market displayed a significant upward shift February 11, 2026.
- Market showed another strong upward shift February 05, 2026.
- Market saw a notable downward adjustment January 28, 2026.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Cut 25bps | 4.0% | 3.4% | The Fed could cut rates to stimulate the economy if inflation cools and growth slows. |
| Fed maintains rate | 97.0% | 94.1% | The Fed may hold rates steady to assess economic data and manage inflation expectations. |
| Cut >25bps | 2.0% | 1.5% | A significant economic downturn or sharp disinflation could prompt the Fed to cut rates aggressively. |
| Hike 25bps | 1.0% | 0.5% | The Fed might hike rates to combat persistent inflation or if the economy strengthens. |
| Hike >25bps | 1.0% | 0.5% | A sudden surge in inflation or strong economic expansion could lead to an aggressive rate hike. |
Current Context
Prediction markets overwhelmingly expect no Fed rate cut in March 2026. As of February 22-24, 2026, prediction markets indicated a significant likelihood of 95-96% that the Federal Reserve will maintain its benchmark interest rate in the 3.5% to 3.75% range at the upcoming March meeting [^]. This expectation was reinforced by the Personal Consumption Expenditures (PCE) price index for December 2025, released around February 20, 2026, which showed both headline and core inflation slightly above forecasts, holding near 3%, above the Fed's 2% target [^]. Consequently, some major financial institutions have revised their outlooks; J.P. Morgan Global Research, around February 20, 2026, no longer anticipates Fed rate cuts in 2026, citing stabilizing unemployment and steady inflation [^]. Similarly, TD Securities, on February 19, 2026, shifted its forecast for rate cuts to commence in the latter half of 2026 (June, September, December) rather than March, attributing this to a resilient economy and stabilizing labor market [^]. Minutes from the January FOMC meeting, released February 18, 2026, had indicated market and survey-based expectations for one to two 25-basis point rate cuts in 2026 [^].
Economic data and internal Fed debates are shaping future rate expectations. Policymakers and market participants are closely monitoring inflation data, especially the PCE Price Index, alongside the Consumer Price Index (CPI) and Producer Price Index (PPI) [^]. Labor market data, including the Employment Situation report (nonfarm payrolls, unemployment rate), Job Openings and Labor Turnover Survey (JOLTS), and Initial Claims, are also crucial, particularly after the January 2026 Employment Situation report showed stronger-than-expected payrolls [^]. Federal Reserve Governor Christopher J. Waller described the March rate decision as a "coin flip" on February 23, 2026, emphasizing its dependence on upcoming labor market data and highlighting a disconnect between broader economic activity and payroll figures, despite his prior favoring of a rate cut in January due to perceived labor market softness [^]. While J.P. Morgan no longer expects cuts in 2026 [^], TD Securities projects cuts later in the year [^]. Earlier, in January 2026, economists surveyed by Bankrate projected three more cuts in 2026, and RSM's Tuan Nguyen projected two cuts, while Goldman Sachs Research in December 2025 expected cuts in March and June [^].
Upcoming data releases and leadership changes introduce policy uncertainties. The next Federal Open Market Committee (FOMC) meeting is scheduled for March 17-18, 2026, with the policy announcement and Fed Chair's press conference on March 18, 2026 [^]. Key economic releases preceding this include the Employment Situation report for February 2026 (expected March 6, 2026), the Consumer Price Index (CPI) for February 2026 (expected March 11, 2026), and the Producer Price Index (PPI) for February 2026 (expected March 12, 2026) [^]. Adding to the complexity is the impending Fed leadership transition, as Fed Chair Jerome Powell's term expires in May 2026, with Kevin Warsh nominated as his successor [^]. Common questions revolve around when rate cuts will begin in 2026 if not in March (mid-to-late 2026 is often cited), how labor market trends and inflation stickiness will influence policy, and the potential effect of new Fed leadership on future monetary policy direction [^]. Individuals are also concerned about the impact of prolonged higher interest rates on borrowing costs and savings instruments [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market shows a decisive downward trend, with the probability of a 25 basis point Fed rate cut in March 2026 declining from a starting point of 19.0% to a current price of 4.0%. The initial price held near the $0.19 level for a significant period, acting as an early support base, which was definitively broken in late January. The chart's primary price action is characterized by sharp, event-driven drops that systematically priced out the likelihood of a cut. The most significant of these movements include an 8.0 percentage point drop on January 28 following a hawkish FOMC meeting, and another 11.0 percentage point drop on February 11, driven by strong jobs data and hawkish commentary from Fed officials. A brief, anomalous spike to 19.0% on February 5 was attributed to market structure factors rather than fundamental news, and the price quickly reverted to its downward trajectory.
The sustained downward pressure and the causes for the price drops reveal a market consistently reacting to macroeconomic data and central bank signaling that points toward a higher-for-longer interest rate environment. The market's final descent to the 3.0-4.0% range was cemented by the late-February PCE report, which showed inflation remaining stubbornly above the Fed's target, and subsequent revisions from major financial institutions like J.P. Morgan, which removed 2026 rate cuts from their forecasts. This sequence of events established a new, firm price floor around the $0.04 level, representing what traders view as a negligible probability of a cut.
The market's high total volume of over 5 million contracts traded indicates deep liquidity and strong conviction among participants. The price trend isn't a result of low-volume drift but rather a robust consensus formed through significant trading activity, particularly around key economic data releases and FOMC events. Overall, the chart reflects a dramatic shift in market sentiment over the observed period. It has moved from pricing in a modest possibility of monetary easing to an overwhelming consensus that the Federal Reserve will hold interest rates steady, a sentiment strongly supported by the prevailing economic data and official communications.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Fed maintains rate
📈 February 11, 2026: 12.0pp spike
Price increased from 80.0% to 92.0%
What happened: The 12.0 percentage point spike in the "Fed maintains rate" prediction market on February 11, 2026, was primarily driven by hawkish remarks from Federal Reserve officials and a stronger-than-expected jobs report [^]. On February 10, Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan, both voting members, publicly advocated for holding interest rates steady due to persistent inflation concerns [^]. These statements, along with the surprisingly strong January jobs report showing 130,000 payroll additions (released on February 11), reinforced the likelihood of the Fed maintaining rates [^]. Financial news outlets, including a Yahoo Finance YouTube video featuring an influential analyst discussing these very statements on February 11, rapidly disseminated this information, coinciding with the market movement [^]. Social media, in this context, acted as a contributing accelerant by quickly spreading news of these key official pronouncements and economic data [^].
Outcome: Cut 25bps
📈 February 05, 2026: 10.0pp spike
Price increased from 9.0% to 19.0%
What happened: The 10.0 percentage point spike in the "Cut 25bps" outcome for the "Fed decision in Mar 2026?" prediction market on February 05, 2026, was primarily driven by market structure factors rather than social media activity or traditional news [^]. Despite some earlier predictions of March cuts, the prevailing sentiment in late January and early February 2026, as indicated by financial market probabilities, favored the Federal Reserve holding rates steady, with a low likelihood (13-18%) of a 25 basis point cut [^]. No specific social media posts from influential figures or breaking news on or immediately preceding February 5, 2026, emerged to justify such a sharp increase in rate cut expectations [^]. Therefore, social media was (d) irrelevant as the primary driver [^].
📉 January 28, 2026: 8.0pp drop
Price decreased from 17.0% to 9.0%
What happened: The primary driver of the 8.0 percentage point drop in the "Cut 25bps" outcome for the "Fed decision in Mar 2026?" market on January 28, 2026, was the Federal Open Market Committee (FOMC) meeting and subsequent press conference by Chair Jerome Powell [^]. On this date, the Fed opted to hold interest rates steady, as widely anticipated, but crucially, its statement and Powell's remarks had a "hawkish tilt" [^]. Powell noted the U.S [^]. economy was on a "firm footing" with "solid" growth and "somewhat elevated" inflation, implying less urgency for immediate rate cuts and leading markets to significantly scale back expectations for a March 2026 reduction [^]. Social media activity from key figures was not identified as a primary driver; the price movement coincided directly with the official Fed announcements [^]. This indicates traditional news and announcements were the primary driver [^].
4. Market Data
Contract Snapshot
The provided page content "Fed decision in March? Odds & Predictions 2026" does not contain information regarding the specific triggers for a YES or NO resolution, key dates or deadlines, or any special settlement conditions for the Kalshi prediction market. To understand these rules, more detailed market information would be required.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| Fed maintains rate | $0.97 | $0.04 | 97% |
| Cut 25bps | $0.04 | $0.97 | 4% |
| Cut >25bps | $0.02 | $0.99 | 2% |
| Hike 25bps | $0.01 | $1.00 | 1% |
| Hike >25bps | $0.01 | $1.00 | 1% |
Market Discussion
Discussions and debates surrounding the Federal Reserve's decision in March 2026 are predominantly focused on the high likelihood of the Fed maintaining its current interest rate range of 3.50%-3.75% [^]. Prediction markets show an overwhelming consensus, with probabilities around 96% for rates to remain unchanged, reflecting confidence in a steady monetary policy [^]. Experts and commentators are weighing a softening labor market against persistent inflation and solid economic expansion, with Fed officials indicating the decision hinges on upcoming economic data, particularly employment figures [^]. While a hold is widely expected for March, there are ongoing debates about the potential for future rate cuts later in 2026, or even a possible hike in 2027, highlighting uncertainty beyond the immediate decision [^].
5. Why is the requested research data currently unavailable?
| Status | Service Unavailable |
|---|---|
| Request ID | 9d340c0f5add197f-DEL |
| Troubleshooting Tip | Refer to Render’s documentation |
Research findings for the FOMC scenario are currently unavailable due to an error. The specific research findings concerning the revealed preference of the median voter on the March 2026 FOMC, particularly regarding reactions to a February 2026 Core PCE print above 2.7% year-over-year and nonfarm payrolls below 75,000, could not be extracted. This inability to retrieve information stemmed from a 'Bad Gateway' error, which prevented access to the requested data.
This error indicates the research data service is presently inaccessible. The 'Bad Gateway' error signifies that the service responsible for providing the research data is currently unavailable. Consequently, it is recommended to attempt the data extraction again after a short interval. Should the issue persist, site owners are advised to consult Render’s documentation for detailed guidance on troubleshooting this specific type of system error.
6. Was the Research Request Successfully Processed?
| Research Status | Failed (502 Bad Gateway) |
|---|---|
| Error Type | HTML Error Document |
| Details | Service unavailable, please retry [Render.com] |
The requested research could not be processed due to a technical error. The research query, which sought to analyze the trajectory of the Chicago Fed's National Financial Conditions Index (NFCI) and the Senior Loan Officer Opinion Survey (SLOOS) in early 2026 and their potential impact on monetary policy, could not be completed. Specifically, a '502 Bad Gateway' error occurred, preventing the system from extracting any specific findings or data points relevant to the original question.
The error prevented analysis of financial conditions and policy. The system received an HTML error page from an external service, indicating that the service was temporarily unavailable. As a result, it was not possible to determine if a sharp tightening in both the NFCI (moving above 0) and the SLOOS (net >30% of banks tightening C&I loan standards) would be sufficient to override sticky inflation data and trigger a 'financial stability' cut. Users are advised to try the research request again at a later time, as this error typically signifies a temporary service interruption. Further details regarding this type of error can often be found in the documentation of the service provider, such as Render.com's troubleshooting guides.
7. Was the Research Question Successfully Processed?
| Research Status | Failed (Bad Gateway) |
|---|---|
| Error Code | 502 |
| Request ID | 9d340b4a7ae59cd7-DEL |
Research findings are currently unavailable due to a technical error. The research request encountered a 'Bad Gateway' (502) response. This specific error indicates that the upstream service responsible for fulfilling the request was either unreachable or returned an invalid response.
The service unavailability prevented data extraction and analysis. Consequently, no specific findings or data points could be extracted for the implied policy rate for the March 18, 2026 meeting, its comparison to the median dot in the December 2025 Summary of Economic Projections (SEP), or the historical FOMC response to divergences. It is recommended to attempt the request again later.
8. Why did the research query result in a 502 Bad Gateway Error?
| Research Status | Failed: 502 Bad Gateway |
|---|---|
| Source | Render.com Error Page |
| Details | Service temporarily unavailable |
The requested research on global growth indicators could not be processed. Specifically, the query encountered a '502 Bad Gateway' error, which indicates that the service responsible for fulfilling the request was temporarily unavailable. This type of error typically points to a transient problem with the server or network infrastructure, rather than an issue with the submitted request itself.
As a direct result, no specific findings or data could be extracted. This prevented the assessment of the S&P Global Manufacturing PMI and China's Caixin Manufacturing PMI for January/February 2026, and their potential implications for a global disinflationary impulse or an 'insurance' cut. For future attempts, users are generally advised to wait a few minutes and retry the query, as such temporary service issues often resolve themselves. Site owners, when confronted with this error, are typically recommended to implement troubleshooting steps related to deployment and gateway issues.
9. Why did the research fail to provide any findings for this query?
| Research Status | Failed (502 Bad Gateway) |
|---|---|
| Error Type | Server-side gateway error |
| Data Availability | No data retrieved |
Research on FOMC speaker tone was incomplete due to server error. The research project, which aimed to map the official FOMC speaker calendar after the February 2026 employment report but before the March pre-meeting blackout period to identify any coordinated shift in tone or divergence between the Board of Governors (e.g., Waller, Bowman) and regional Fed Presidents regarding labor market data interpretation, could not be completed. This inability to fulfill the research request was directly caused by a 502 Bad Gateway error encountered during the processing.
Server communication issues prevented specific findings and analysis. The 502 Bad Gateway error indicates a problem with the server attempting to fulfill the request, likely stemming from an issue with communication between web servers. Consequently, no specific findings, data points, or detailed analysis regarding the FOMC speaker tone could be provided from this research attempt. It is recommended that the research be re-attempted after a short period, as such server errors are often temporary.
10. What Could Change the Odds
Key Catalysts
The probability of a Federal Reserve rate change in March 2026 could increase significantly if key economic indicators show substantial weakness. This includes a much weaker-than-expected Employment Situation (Jobs Report) for February, released on March 6, 2026, signaling a slowdown in job growth or a rise in unemployment [^]. Similarly, surprising contractions in the manufacturing and services sectors, indicated by lower-than-anticipated ISM Manufacturing PMI on March 2, 2026, and ISM Services PMI on March 4, 2026, respectively, would be crucial [^]. A notable decline in consumer spending, evidenced by much weaker Advance Monthly Sales for Retail and Food Services for February on March 16, 2026, would also weigh heavily [^]. Furthermore, unexpected disinflationary pressures, such as a surprisingly low Consumer Price Index (CPI) for February on March 11, 2026, or a significantly low Personal Consumption Expenditures (PCE) price index for February on March 13, 2026, could prompt the Fed to act [^].
Conversely, the likelihood of no change in the federal funds rate would strengthen if economic data remains stable or moderately strong, aligning with or slightly exceeding expectations [^] . This includes a resilient February Jobs Report on March 6, 2026, along with ISM Manufacturing and Services PMIs on March 2 and March 4, 2026, respectively, that indicate continued expansion [^]. Steady consumer demand, reflected in in-line or slightly above-expected Advance Monthly Sales for Retail and Food Services on March 16, 2026, would also support a hold [^]. Crucially, inflation data within expectations, meaning CPI on March 11, 2026, and PCE on March 13, 2026, align with forecasts, would suggest inflation is cooling at a controlled pace without requiring immediate intervention [^]. Additionally, any dovish or neutral commentary from Federal Reserve officials before the March 17-18, 2026 FOMC meeting, emphasizing patience or a wait-and-see approach, would reinforce the expectation of no rate change [^].
Key Dates & Catalysts
- Strike Date: March 18, 2026
- Expiration: June 17, 2026
- Closes: March 18, 2026
11. Decision-Flipping Events
- Trigger: The probability of a Federal Reserve rate change in March 2026 could increase significantly if key economic indicators show substantial weakness.
- Trigger: This includes a much weaker-than-expected Employment Situation (Jobs Report) for February, released on March 6, 2026, signaling a slowdown in job growth or a rise in unemployment [^] .
- Trigger: Similarly, surprising contractions in the manufacturing and services sectors, indicated by lower-than-anticipated ISM Manufacturing PMI on March 2, 2026, and ISM Services PMI on March 4, 2026, respectively, would be crucial [^] .
- Trigger: A notable decline in consumer spending, evidenced by much weaker Advance Monthly Sales for Retail and Food Services for February on March 16, 2026, would also weigh heavily [^] .
13. Historical Resolutions
Historical Resolutions: 50 markets in this series
Outcomes: 10 resolved YES, 40 resolved NO
Recent resolutions:
- KXFEDDECISION-26JAN-H26: NO (Jan 28, 2026)
- KXFEDDECISION-26JAN-H25: NO (Jan 28, 2026)
- KXFEDDECISION-26JAN-H0: YES (Jan 28, 2026)
- KXFEDDECISION-26JAN-C26: NO (Jan 28, 2026)
- KXFEDDECISION-26JAN-C25: NO (Jan 28, 2026)
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