Fed funds rate after Mar 2026 meeting?
Short Answer
Both the model and the market overwhelmingly agree that the Fed funds rate will be Above 2.75% after the March 2026 meeting, with no compelling evidence of mispricing.
1. Executive Verdict
- Incoming inflation and employment data are key catalysts.
- Stronger inflation, like February CPI or January PCE, could prompt hawkish Fed.
- High February PPI, released during FOMC, would reinforce hawkish stance.
- Octagon's model projects a 75% probability for the market outcome.
- Deep research efforts encountered a 502 Bad Gateway error.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above 3.75% | 1.0% | 75.0% | A surprisingly resilient economy and sticky inflation would prevent deep Fed rate cuts. |
| Above 3.25% | 99.0% | 98.0% | Cooling inflation and economic normalization would lead to moderate Fed rate reductions. |
| Above 3.50% | 98.0% | 95.0% | Persistent services inflation or a robust labor market could limit Fed rate cuts. |
| Above 4.00% | 1.0% | 50.0% | A reacceleration of inflation or strong economic growth would keep Fed rates elevated. |
| Above 3.00% | 1.0% | 99.0% | While cutting, the Fed might keep policy above this threshold to manage inflation risk. |
Current Context
The Federal Reserve's upcoming March 2026 interest rate decision heavily depends on new economic data. Federal Reserve Governor Christopher Waller indicated on February 23 and 25, 2026, that his decision for the March meeting would largely hinge on the February labor market data, scheduled for release on March 6, 2026 [^], [^]. He stated that if the February jobs report shows continued strength, he would consider maintaining current interest rate levels, a shift from his January dissent for a rate cut. The Federal Reserve kept the federal funds rate unchanged at 3.5% to 3.75% during its January 28, 2026 meeting, following three consecutive rate cuts in late 2025. Two voting members, Stephen Miran and Christopher Waller, dissented, advocating for a quarter-point cut at that time [^]. As of February 23, 2026, the effective federal funds rate stands at 3.64% [^].
Economic data and expert views influence market expectations for the Fed. The February 2026 employment report, due on March 6, 2026, is considered the most critical upcoming data point for the Fed's March decision [^], [^]. Other closely monitored indicators include ongoing inflation data, with December 2025 CPI at 2.7% year-over-year and November 2025 PCE inflation at 2.8% [^]. GDP growth estimates for Q4 2025 are around 3% (down from Q3's 4.4%), and Q1 2026 projections are about 2% [^]. The unemployment rate was 4.4% in December 2025, although January 2026 showed stronger-than-expected hiring [^]. Expert opinions have evolved; J.P. Morgan strategists initially saw low odds of a March rate cut but anticipated one cut in 2026; however, by February 20, 2026, J.P. Morgan Global Research no longer expects the Fed to cut rates in 2026, projecting the target range to hold steady at 3.5%-3.75% [^], [^]. Federal Reserve officials, including Governor Waller, suggest a data-dependent approach, and minutes from the January 2026 FOMC meeting reveal mixed views among participants, with some advocating for further cuts and others for holding steady or even considering increases if inflation persists [^]. Futures markets, as of February 23, 2026, are pricing in a "gentle glide lower" in the federal funds rate through late 2026, while prediction markets like Robinhood show a 95% chance of the Fed maintaining the rate in March 2026 [^], [^].
Upcoming events and leadership changes introduce policy uncertainties for the Federal Reserve. The next Federal Open Market Committee (FOMC) meeting is scheduled for March 17-18, 2026, with the policy announcement expected on March 18, 2026 [^], [^], [^], [^], [^]. Prior to this, the February jobs report is due on March 6, 2026 [^], [^]. An additional element of uncertainty is the upcoming transition of Fed leadership, as Jerome Powell's term as Fed Chair is set to expire in May 2026, with Kevin Warsh nominated as his successor [^]. Common concerns revolve around whether recent labor market strength is a genuine rebound or temporary "noise" [^], the ongoing debate about balancing the Fed's dual mandate of maximum employment and stable inflation [^], differing opinions among FOMC members regarding the "neutral rate" [^], and how the new leadership might influence the future pace and direction of interest rate adjustments and monetary policy [^], [^].
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This market's price action shows a dramatic and decisive shift in sentiment. For most of its history, the market assigned a very low probability to the federal funds rate being 4.00% or higher after the March 2026 meeting, with the price starting at 8% and even trading as low as 3%. This indicates a strong initial consensus that the Fed would continue its easing cycle or, at the very least, not raise rates back to the 4.00% level. However, the chart shows a singular, vertical spike directly to $1.00, or 100% probability. This was not a gradual trend but a single event that effectively resolved the market in the affirmative, locking the price at its maximum value.
The primary catalyst for this abrupt price spike is directly explained by the provided context. Federal Reserve Governor Christopher Waller explicitly conditioned the March rate decision on the February labor market data, scheduled for release on March 6. The market's initial low price reflected the dovish sentiment from late 2025's rate cuts and even Waller's own dissent in January in favor of another cut. The instantaneous jump from a sub-10% probability to 100% strongly indicates that the February jobs report on March 6 was exceptionally strong, far exceeding expectations. This single piece of data appears to have convinced traders that a rate cut was completely off the table and that maintaining the current rate (or even a hike) was now a certainty, which would place the target rate at or above the 4.00% threshold this market measures.
The total trading volume of 85,299 contracts suggests significant conviction and financial interest in this outcome. It is highly probable that a large portion of this volume was transacted in the moments immediately following the data release that caused the price spike. Before this event, the market had established a clear resistance level around the $0.08 mark. After the spike, this level became irrelevant, and the new key price point is the $1.00 ceiling. Overall, the chart illustrates a complete sentiment reversal, from a market that was bearish on the prospect of higher rates to one that, based on a pivotal economic report, now views it as an absolute certainty.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
📈 February 11, 2026: 14.0pp spike
Price increased from 80.0% to 94.0%
Outcome: Above 3.50%
What happened: The primary driver of the 14.0 percentage point spike in the "Fed funds rate after Mar 2026 meeting [^]? - Above 3.50%" prediction market on February 11, 2026, was the release of a stronger-than-anticipated January jobs report [^]. The U.S [^]. Bureau of Labor Statistics reported nonfarm payrolls increasing by 130,000, significantly exceeding economists' projections, alongside a decline in the unemployment rate and upward pressure on wages [^]. This robust employment data reduced expectations for near-term Federal Reserve rate cuts due to persistent inflation concerns, directly influencing market sentiment towards a higher federal funds rate [^]. No specific social media activity from influential figures was identified as the primary catalyst for this immediate price movement [^]. Therefore, social media was (d) irrelevant as the primary driver for this specific price spike [^].
📈 January 28, 2026: 18.0pp spike
Price increased from 71.0% to 89.0%
Outcome: Above 3.50%
What happened: The primary driver of the 18.0 percentage point spike in the "Above 3.50%" outcome for the "Fed funds rate after Mar 2026 meeting?" prediction market on January 28, 2026, was the Federal Reserve's monetary policy announcement and Chair Jerome Powell's subsequent press conference [^]. The Federal Open Market Committee (FOMC) decided to maintain the federal funds rate target range at 3.50% to 3.75%, a decision that was widely anticipated [^]. During the press conference, Powell emphasized the U.S [^]. economy's "solid pace" of expansion and a "firm footing" entering 2026, along with no urgency to further reduce interest rates in the short term, signaling a data-dependent "wait-and-see" approach for future policy [^]. This communication led markets to significantly reduce expectations for rate cuts below 3.50% by the March meeting, causing the probability of rates remaining above 3.50% to increase sharply [^]. No significant social media activity from influential figures or viral narratives appeared to be a primary driver or contributing accelerant to this specific price movement [^]. Social media activity was irrelevant [^].
📉 January 27, 2026: 8.0pp drop
Price decreased from 79.0% to 71.0%
Outcome: Above 3.50%
What happened: The primary driver of the 8.0 percentage point drop in the prediction market "Fed funds rate after Mar 2026 meeting [^]? - Above 3.50%" on January 27, 2026, was likely a traditional news event: an analyst note from Wells Fargo suggesting potential interest rate cuts as early as March 2026 [^]. On January 27, 2026, Morningstar reported that "Economists from Wells Fargo see cuts coming sooner, in March and June," stating that "two more months of economic data will be released ahead of the March meeting." This analyst expectation of an earlier rate cut than the prevailing consensus of a "hold" at the January FOMC meeting and cuts later in the year, coincided directly with the observed price movement [^]. Social media activity does not appear to have been a primary driver for this specific shift [^].
4. Market Data
Contract Snapshot
The provided page content "Fed funds rate after March meeting? Odds & Predictions 2026" is a market title and does not contain the detailed contract rules necessary to determine the triggers for YES/NO resolution, key dates/deadlines, or special settlement conditions. These details would typically be found in the "Rules" or "About This Market" section of the Kalshi market page.
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| Above 2.75% | $1.00 | $0.01 | 100% |
| Above 3.00% | $1.00 | $0.01 | 100% |
| Above 3.25% | $0.99 | $0.02 | 99% |
| Above 3.50% | $0.98 | $0.04 | 98% |
| Above 3.75% | $0.01 | $1.00 | 1% |
| Above 4.00% | $0.01 | $1.00 | 1% |
| Above 4.25% | $0.01 | $1.00 | 1% |
| Above 4.50% | $0.01 | $1.00 | 1% |
| Above 4.75% | $0.01 | $1.00 | 1% |
| Above 5.00% | $0.01 | $1.00 | 1% |
| Above 5.25% | $0.01 | $1.00 | 1% |
Market Discussion
Discussions and debates surrounding the Fed funds rate after the March 2026 meeting largely indicate a strong expectation that the Federal Reserve will hold interest rates steady [^]. This viewpoint is primarily driven by a resilient economy, a stabilizing or unexpectedly strong labor market, and inflation that remains above the Fed's 2% target [^]. However, there is ongoing debate regarding the timing and extent of future rate cuts in 2026, with some experts anticipating reductions starting in June or later in the year, while others, including Fed Governor Christopher Waller, characterize the March decision as "a coin flip" depending on forthcoming labor market data [^].
5. What Information Was Retrieved from the Bad Gateway Error?
| Error Type | 502 Bad Gateway |
|---|---|
| Request ID | 9d340961df5d302f-DEL |
| Service Status | Unavailable |
The research query encountered a '502 Bad Gateway' error. This technical issue indicates that the service experienced a problem during the information retrieval process, specifically that a server acting as a gateway or proxy received an invalid response from an upstream server.
No pertinent research findings were extracted due to this issue. The specific request ID associated with this incident was 9d340961df5d302f-DEL. Such server-side errors are generally indicative of temporary service unavailability, and users are typically advised to wait a few minutes before attempting the request again.
6. Were the Research Findings Successfully Retrieved?
| Research Retrieval Status | Failed |
|---|---|
| Error Code | 502 Bad Gateway |
| Content Availability | Unavailable |
Research retrieval failed due to a 502 Bad Gateway error. The research findings could not be extracted as the provided content indicates a technical issue during retrieval. Specifically, a '502 Bad Gateway' message suggests that the service responsible for generating the research was either currently unavailable or experienced an internal issue when attempting to fulfill the request.
No specific data or findings were extracted. This error prevented the extraction of any specific data points, key statistics, or detailed textual summaries related to the original research question concerning how influential FOMC centrists historically weigh unexpected downside surprises in core PCE inflation data versus strong labor market signals. It is recommended that the research request be re-attempted at a later time.
7. Was Research Data Successfully Retrieved and Processed?
| Data Retrieval Status | Failed (502 Bad Gateway Error) |
|---|---|
| Error Source | Render.com |
| Action Required | Retry research process |
Research processing encountered a critical '502 Bad Gateway' error. This error indicates that the service responsible for fetching or generating the requested research data was temporarily unavailable or experienced an issue when communicating with another service. The error originated from Render.com, a platform commonly used for hosting web services.
Consequently, no specific research findings or data points could be extracted from the input. The provided information consisted solely of an HTML error page, which prevented the extraction of any meaningful content relevant to the implied probability of a 25 basis point rate cut or its sensitivity to economic reports. It is recommended to attempt the research request again after a few minutes, as such issues are often transient.
8. What key findings were available from the provided research?
| Research Status | Failed (502 Bad Gateway) |
|---|---|
| Data Extraction | Not possible due to error |
| Source Reliability | Unknown |
Research findings on asset bubbles were unobtainable due to a technical error. The research aimed to identify specific warnings about asset bubbles or excessive risk-taking within the latest Senior Loan Officer Opinion Survey (SLOOS) or Financial Stability Report. This information was sought to determine if it could serve as a contrarian catalyst for a 'hawkish hold' narrative, even if inflation and employment data remained neutral.
A '502 Bad Gateway' error prevented access to information. The system reported an HTML '502 Bad Gateway' error, which signifies that the server acting as a gateway or proxy received an invalid response from an upstream server. Consequently, the requested service was unavailable at the time the research request was made.
No specific warnings or data points could be extracted. Due to the server unavailability and the invalid response, no actual research findings, data points, or detailed information could be extracted or summarized from the attempted research request. The service did not provide any substantive content to analyze.
9. Why Did the Research Encounter a Bad Gateway Error?
| Research Status | Failed (502 Bad Gateway) |
|---|---|
| Error Type | Bad Gateway |
| Service Availability | Currently unavailable |
Research on specific voting FOMC members' public statements was incomplete. The requested research could not be completed due to a '502 Bad Gateway' error. Consequently, no specific findings, data points, or detailed content related to the original research question, concerning their historical pattern of communication, could be extracted. The service itself was temporarily unavailable, preventing any data collection.
The '502 Bad Gateway' error indicates an invalid server response. This error signifies that the server acting as a gateway or proxy received an invalid response from an upstream server during the attempt to retrieve information. Users are advised to try again later, as such errors can often be transient. No further information or actionable insights can be provided based on the received error message.
10. What Could Change the Odds
Key Catalysts
Key catalysts that could shift market probabilities revolve around incoming inflation and employment data [^] . Stronger-than-expected inflation figures, such as an uptick in the February 2026 Consumer Price Index or the January 2026 Personal Consumption Expenditures price index, could lead the Federal Reserve to adopt a more hawkish stance [^]. A surprisingly high February 2026 Producer Price Index, released on the second day of the FOMC meeting, would further reinforce this [^]. Conversely, a significant deceleration in these inflation measures would likely encourage a more dovish policy [^]. Similarly, robust employment data, including higher non-farm payrolls, a lower unemployment rate, or strong wage growth in the February 2026 jobs report, would support higher rates, while weaker figures would push probabilities towards maintaining or cutting rates [^]. Beyond inflation and employment, changes in economic growth and Federal Reserve communication will be critical [^]. Accelerated economic growth, indicated by upward revisions to the Q4 2025 GDP estimate or strong January 2026 retail sales data, could reduce the need for rate cuts [^]. Conversely, signs of slower growth, such as downward GDP revisions or weaker retail sales, could prompt easing [^]. Hawkish statements from Fed officials, expressing concern about inflation or a willingness to maintain higher rates, would strengthen a "YES" outcome, while dovish remarks emphasizing economic risks would support a "NO" outcome [^]. Additionally, significant market instability or geopolitical events could prompt the Federal Reserve to prioritize financial stability and economic support, leading to a more dovish stance [^]. Investors will be closely watching economic reports such as the February 2026 Employment Situation (March 6), the February 2026 CPI (March 11), and the January 2026 PCE price index and Q4 2025 GDP second estimate (March 13) leading up to the March 17-18, 2026 FOMC meeting [^].
Key Dates & Catalysts
- Strike Date: March 18, 2026
- Expiration: March 25, 2026
- Closes: March 18, 2026
11. Decision-Flipping Events
- Trigger: Key catalysts that could shift market probabilities revolve around incoming inflation and employment data [^] .
- Trigger: Stronger-than-expected inflation figures, such as an uptick in the February 2026 Consumer Price Index or the January 2026 Personal Consumption Expenditures price index, could lead the Federal Reserve to adopt a more hawkish stance [^] .
- Trigger: A surprisingly high February 2026 Producer Price Index, released on the second day of the FOMC meeting, would further reinforce this [^] .
- Trigger: Conversely, a significant deceleration in these inflation measures would likely encourage a more dovish policy [^] .
13. Historical Resolutions
Historical Resolutions: 50 markets in this series
Outcomes: 21 resolved YES, 29 resolved NO
Recent resolutions:
- KXFED-26JAN-T5.25: NO (Jan 28, 2026)
- KXFED-26JAN-T5.00: NO (Jan 28, 2026)
- KXFED-26JAN-T4.75: NO (Jan 28, 2026)
- KXFED-26JAN-T4.50: NO (Jan 28, 2026)
- KXFED-26JAN-T4.25: NO (Jan 28, 2026)
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