As the Fed’s first interest rate decision of 2026 approaches, market expectations are clearly reflected in the forecasting markets.
According to Polymarket data, the strongest scenario for the Fed’s interest rate decision on January 28, 2026, is that interest rates will remain unchanged.
According to forecast contracts traded on Polymarket, the probability of no change in interest rates is overwhelmingly high at 85%. A 25 basis point rate cut is priced at 15%, while a 50 basis point or greater cut remains at a very low 1%. The scenario of an interest rate increase is almost entirely ruled out by the market, with a probability of less than 1%. The interest rate decision will be determined by the official Fed statement following the Federal Open Market Committee (FOMC) meeting on January 27-28, 2026.
On the Fed’s side, assessments regarding the economic outlook and income distribution are attracting attention. In his speech at the Yale CEO Summit on December 16th, Christopher Waller highlighted the deterioration in income distribution, stating that conditions are favorable for retailers and companies targeting the upper income bracket, but the lower half of the population is severely affected by the economic situation. Waller said that the Fed’s priority is to strengthen the labor market and support economic growth, and that this process should balance job security and wage increases over time.
*This is not investment advice.
