Prediction markets are now pricing a 71% chance that the Federal Reserve cuts the federal funds rate by 25 basis points at the November 4-5 FOMC meeting, a sharp jump from the 58% implied odds seen one week ago. The move follows softer-than-expected September CPI data and Chair Jerome Powell’s dovish remarks at last Thursday’s economic forum in Boston. With under two weeks to the decision, Kalshi and Polymarket are seeing their highest weekly volume on Fed-related contracts since the March meeting.
What is unusual this cycle is the convergence between the two largest US prediction venues. Kalshi’s “Fed decision in November” market is trading at 72 cents for a 25bp cut, while Polymarket’s equivalent contract clears at 70 cents. That two-point spread has narrowed from a six-point gap at the start of October, suggesting both market communities now share the same base case: one more cut, then a pause.
The Base Case: 25bp Cut, Then a Hold
The dominant trade across both platforms is a 25bp cut in November followed by a hold at the December 16-17 meeting. Kalshi’s “no change in December” contract trades at 54 cents, while a second 25bp cut sits at 38 cents. A 50bp move in either direction is priced below 5%.
Traders appear to be reading three signals the same way. First, core PCE at 2.6% year over year is close enough to the 2% target to justify incremental easing but not aggressive cuts. Second, the labor market has stabilized at a 4.3% unemployment rate, removing the urgency that drove the September cut. Third, Powell has repeatedly framed the current cycle as “recalibration” rather than a response to recession risk, language that implies measured steps.
Polymarket order books tell a similar story. The top five bidders on the “no change in December” contract are posting size at 52 to 56 cents, with no visible interest in pricing a hold above 60. That ceiling has been remarkably stable since the September meeting minutes dropped.
The 2027 Rate Path: Where Opinions Diverge
The consensus breaks down when traders look further out. Kalshi’s “number of 2027 rate cuts” contract is the single highest-volume Fed market on the platform this month, and it shows a market that is actively unsure.
The implied probability distribution for 2027 cuts currently looks like this:
- Zero cuts: 11%
- One cut (25bp): 24%
- Two cuts (50bp): 31%
- Three cuts (75bp): 22%
- Four or more cuts: 12%
That is a classic bimodal setup, with meaningful weight on both the “soft landing holds” scenario (one to two cuts) and the “growth slows and the Fed is forced lower” scenario (three or more cuts). The variance in this contract has widened over the past 30 days, which traders typically read as a signal that the market is pricing more uncertainty rather than converging on a view.
The Powell Succession Trade
A quieter but telling contract is Polymarket’s “Jerome Powell replaced before term ends” market, which has drifted from 8% in August to 14% today. Powell’s term as Chair expires in May 2027, and President Trump has made no secret of his preference for a more dovish successor. The move in this contract has correlated almost perfectly with headlines about potential nominees.
The related “next Fed Chair” market is thinly traded but shows Kevin Warsh at 32%, Christopher Waller at 23%, and Kevin Hassett at 18%. For prediction market traders, these contracts function as a cleaner read on the political dimension of monetary policy than any Fed-watcher survey, because the money is real and the resolution is binary.
What the Positioning Reveals
Three signals stand out when you aggregate the Fed-related contracts across Kalshi and Polymarket. First, the market has essentially closed the door on a 50bp cut, a scenario that was trading above 15% as recently as early October. Second, the December hold is now the overwhelming favorite, which implies traders expect Powell to signal a pause in his November press conference. Third, the 2027 distribution shows a market that has not yet committed to a terminal rate, which is unusual this late in a cutting cycle.
For traders considering positions, the asymmetric opportunities sit at the tails. A 50bp cut in November at 4 cents offers 24-to-1 if an unexpected shock forces the Fed’s hand. On the other side, a December cut at 38 cents offers roughly 1.6-to-1 if Powell surprises with a more aggressive easing path. Neither is a base case, but both are priced thinly enough to warrant a look.
Where to Trade Fed Rate Markets
Kalshi remains the deepest venue for US-based traders interested in Fed decision contracts, with CFTC-regulated binary markets on every FOMC meeting and separate contracts for the SEP dot-plot medians. Volume on the November contract has exceeded $18 million as of this week.
Polymarket offers tighter spreads on longer-dated contracts, including the 2027 cut-count market and the Powell succession series. Non-US traders tend to prefer Polymarket for the broader contract menu and higher ceilings on position size.
For a side-by-side comparison of both platforms, including fees, resolution sources, and withdrawal speeds, see our best prediction markets rankings. Both venues have earned their spots at the top for Fed and macro contracts, and the current narrowing spread between them is a useful signal that the smart money is converging on a view, not diverging.