What will the Fed rate be at the end of 2026?

Traders currently price "3.75%" at 41% for "What will the Fed rate be at the end of 2026?". Over the past 24 hours that probability moved up 1.1 points. Full distribution: 3.75% 41%, 4.0% 26%, 4.25% 14%, 3.5% 8%. The market has traded $6.8M in total volume and resolves Dec 9, 2026. Persistent inflation above the Fed's 2% target, with July CPI at 3.4% and core at 2.5%, combined with a divided FOMC that saw three members dissent in favor of a July hike, has shifted trader expectations toward steady or modestly higher rates by year-end. Recent soft employment data and elevated uncertainty from Middle East developments have tempered immediate action but reinforced caution, keeping the current 3.50-3.75% target range in place through multiple meetings. Market pricing now leans toward the 3.75% or 4.0% levels as the most probable endpoints, reflecting the balance between inflation pressures and growth signals. Upcoming September and December FOMC decisions remain key catalysts that could adjust these probabilities based on incoming data.

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