Fed rate odds: October hold contract settles as December bar holds near 81.5%

The Federal Reserve held its target range at 3.75 percent to 4.00 percent on October 28, and Kalshi's decision ladder has now settled the way the market priced it. The contract tied to a fed funds rate at or above 3.75 percent resolved yes at a final 0.99, while the next strike, 4.00 percent, resolved no at 0.03. The effective rate inside the range, roughly 3.83 percent, cleared the lower threshold and not the upper one, so the venue graded the October meeting as the hold investors had priced for weeks.

The settlement matters for what it confirms about market structure rather than for any surprise. The morning of the decision, the desks that run these books had the October no-change outcome priced above 99 percent, and Polymarket's equivalent contract showed a 99.95 percent hold. When the deciding prints landed with two of twelve officials dissenting in favor of a hike, the October book had nothing left to give back. The residual risk sat entirely in December, and it still does.

Related reading: Fed rate path odds: Kalshi's December ladder prices a 25 bps hike at 79 percent after consumer confidence hits 91.7.

On Kalshi's December ladder, last traded on the morning of October 29, the contract for the fed funds rate reaching 4.00 percent or higher quoted a bid of 0.81 and an ask of 0.82, an implied probability of about 81.5 percent. Midway to that mark, the 3.50 percent and 3.75 percent contracts sit at or near 0.99, which is the market's way of saying the current band is the base case and the action is above it. That threshold is the one-market version of the December-meeting question: does the hold band of 3.75 percent to 4.00 percent get lifted heading into 2027, or does the Federal Reserve stay put? Around 18 percent of the distribution still sits below that line, comfortably inside the band.

The conventional rates market reads the same way. The 13-week Treasury bill, quoted near 4.00 percent in Wednesday's session, sits at the top of the target band rather than in its middle, which is what a market carrying a live hike debate looks like. A book that priced no further tightening would anchor the front of the curve closer to the center of the range. The 10-year Treasury, trading around 5.05 percent, is a separate and much larger macro story, but the short end is the cleaner read on what the next meeting is expected to do.

For the broader framework, see our Fed policy coverage.

Related reading: Fed October 2026 odds: Kalshi prices a 94% hold, December still sees a hike.

The heaviest book on the December ladder sits one rung above the scenario the market is pricing. Per Kalshi's trade API, the 4.50 percent strike leads the contract with roughly 295,900 contracts of volume and 158,900 in open interest as of the venue's live feed at the time of writing, ahead of the 4.00 percent bar at about 98,000 and 51,000. Volume and open interest accumulate over a contract's life, so those totals record where rate expectations have sat since the ladder opened as much as they map today's flow. The thickness is still information, and it concentrates in the right place: the book is deepest along the upper rungs, the 4.00 and 4.50 percent bars that price whether the band gets lifted, rather than spread evenly across the stairs. That is the signature of a single binary event, December 9, doing all the pricing work.

Resolutions

October Fed funds rate after the October 2026 meeting, Kalshi, KXFED-26OCT. At coverage the desk's odds pieces put the no-change outcome above 99 percent; the venue settled the 3.75 percent strike yes and the 4.00 percent strike no, consistent with the Federal Reserve holding the range at 3.75 percent to 4.00 percent on the October 28 statement (primary source: FOMC statement, federalreserve.gov). The market's call on the hold was correct.

Related reading: September CPI market: Kalshi 0.5% contract settles YES, October Fed hike odds jump to 36.5%.

Nothing schedules a repricing before December 9, the next FOMC meeting and the date the December ladder settles. Three scheduled prints sit in between: the September PCE data, the October payrolls report due the week of November 2, and the November 3 midterm elections, after which the balance-of-power markets reprice the fiscal outlook that feeds the Fed conversation. Those are the catalysts that would move an 81.5 percent implied probability, and they are all within the next eleven days.

For the event-contract reader this is a cleaner setup than it looked like going in. The October leg has resolved and graded as the market expected, the December leg is built around one meeting, and the few thousand likely votes inside the January and March books are where the distribution starts to spread again. The desk will return to the December ladder when the PCE and payrolls prints give it something new to absorb.

Related reading: Fed decision odds: Polymarket prices a 99.95% hold today as the December hike bet climbs to 81.5%.

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