When Will the Fed Raise Rates Again? Kalshi Puts 55% Chance on a Hike Before 2027

Federal Reserve interest-rate decisions are once again becoming one of the most closely watched economic questions heading into the final months of 2026. Inflation remains above the Fed's 2% target, but softer employment, consumer spending, and recent inflation data have complicated the case for another immediate increase.

Prediction-market traders are still leaning toward another hike. The Kalshi market supplied to Bonus Predictions gives a 55% probability that the next Fed rate increase happens before 2027. The probability rises to 68% before July 2027 and 74% before 2028.

Those numbers show that traders see another increase as more likely than not, but the timing remains uncertain. A 55% probability before January is far from an overwhelming consensus.

Readers new to event contracts can review our Prediction Markets section to learn how market prices translate into probabilities for future economic events.

Will the Fed Raise Rates Before 2027?

The shape of the market is important. Traders are not saying a 2026 hike is certain. Instead, the probability rises as more time is added, suggesting considerable disagreement about exactly when the Fed will feel comfortable tightening policy again.

Economists Are More Cautious Than Prediction-Market Traders

The latest Reuters poll shows a clear difference between professional economists and the current prediction market.

Reuters surveyed 104 economists between August 12 and August 17. Ninety-four, or roughly 90%, expect the Fed to leave rates unchanged at its September meeting.

The divide becomes even more interesting when looking through December. Eighty economists expect no change through the end of 2026. Twenty-two expect at least one increase, while only two expect a rate cut.

That creates a notable disconnect. Kalshi currently places a 55% probability on the next rate hike happening before 2027, while nearly 80% of the economists surveyed by Reuters expect the current rate to remain unchanged through year-end.

Both groups can change their views quickly. Inflation, employment, retail sales, energy prices, and other data released before the remaining FOMC meetings could alter the outlook considerably.

What the Federal Reserve's Own Projections Show

The Federal Reserve's June economic projections do not provide a specific date for the next rate hike, but they show considerable disagreement among policymakers about the appropriate path for rates.

Federal Reserve projections represent individual FOMC participants' assessments of appropriate monetary policy and are not promises or fixed forecasts of future rate decisions.

The 2026 rate projection is especially interesting because the current target range remains 3.50% to 3.75%. Individual projections remain widely dispersed, showing that the committee itself has not settled on one obvious policy path.

J.P. Morgan Now Expects a December Rate Hike

J.P. Morgan's current Global Research outlook sits closer to the prediction market than the Reuters economist consensus.

The bank currently expects the Federal Reserve to increase rates by 25 basis points in December and then maintain a 3.75% to 4.00% target range afterward.

That forecast represents an important change. J.P. Morgan had previously expected the next increase much later, but persistent inflation concerns and the divided July FOMC vote caused the bank to move its expected hike forward.

J.P. Morgan also sees a September increase as possible if inflation begins accelerating again. That means its December forecast should not be read as certainty about the exact meeting.

For more on how economic event contracts are priced, see our Kalshi Prediction Markets guide.

Beth Hammack Is Still Making the Case for Higher Rates

Not every Federal Reserve official believes waiting is the right decision.

Cleveland Fed President Beth Hammack has continued arguing that interest rates should move higher. She welcomed recent improvements in inflation data but questioned whether those improvements will continue or become large enough to return inflation to the Fed's 2% target.

That matters because the current debate is not between a united Fed and outside traders. There is genuine disagreement inside the central bank itself.

Three FOMC members dissented at the July meeting in favor of a quarter-point increase. If inflation begins moving higher again, the number of policymakers supporting another hike could increase.

Why the Fed Could Stay on Hold Through 2026

Why a 2026 Rate Hike Is Still Possible

What a Winning No Prediction Before 2027 Could Pay

The supplied Kalshi market shows No contracts on a Fed hike before 2027 at approximately 45¢.

Buying No means predicting that the next Federal Reserve rate hike will not occur before the 2027 cutoff covered by the contract.

The examples below use a simplified 45¢ contract price, whole contracts, and exclude transaction fees. Each winning contract pays $1 if the No outcome resolves correctly.

These examples assume every contract can be purchased at exactly 45¢. Actual market prices, available quantities, and fees can change the final cost and potential return.

Kalshi, Economists, and Wall Street Do Not Agree Yet

The disagreement itself may be the most important part of the current outlook.

Kalshi traders currently lean toward a hike before 2027. J.P. Morgan also expects a December increase. Beth Hammack believes rates should already be higher.

On the other side, the large majority of economists surveyed by Reuters expect the Fed to stay on hold through December, and recent currency-market movement shows that investors have been reducing their expectations for near-term tightening.

That lack of consensus is why incoming data matters so much. The difference between a September hike, a December hike, and no increase until 2027 could come down to only a few inflation and employment reports.

When Will the Next Fed Rate Hike Happen?

There is no clear consensus yet.

Kalshi currently gives the next hike a 55% probability of occurring before 2027. That rises to 68% before July 2027 and 74% before 2028.

J.P. Morgan currently expects a quarter-point increase in December, and some Federal Reserve policymakers continue to argue that inflation requires tighter policy.

Recent economic data points in the opposite direction. Softer employment, inflation, and consumer spending have reduced the immediate pressure for another hike. The latest Reuters survey finds that nearly 80% of economists expect no change through the end of the year.

That leaves the final months of 2026 unusually difficult to predict. Another inflation surge could make a hike happen quickly. Continued moderation could push the next increase into 2027 or beyond.

For now, the prediction market narrowly favors a hike before January, but the underlying economic data and professional forecasts show why the result remains far from settled.