Traded contract prices on the FOMC outcome sit modestly above the probability implied by conventional rate-futures pricing, with the decision due at 2:00 p.m.
Ahead of this afternoon's Federal Open Market Committee decision, a prediction-market contract on the September outcome was trading with the 25 basis point hike priced at 86 cents against a bid and ask of 86 and 87. The alternatives priced as follows: no change at 15 cents, a hike larger than 25 basis points at 2 cents, a 25 basis point cut at 1 cent and a larger cut at 1 cent.
Those five prices sum to 105 cents, which reflects the structure of the book rather than an error. Each outcome is quoted as an independently traded binary contract with its own bid and ask, not as a single normalised distribution, so the quoted asks include the spread.
Comparing the two markets
The 86 cent level sits modestly above where conventional rate-futures pricing has been quoted through the week, with implied hike probabilities in the 91% to 93% range cited from futures-derived tools and a 78% to 81% range reconciled from prediction-market snapshots taken Saturday through Monday. Read against those earlier prediction-market readings, the direction is a steady climb into the decision.
The gap between prediction markets and rate futures on the same question is the useful observation. Rate futures reflect institutional hedging demand and carry a basis that has nothing to do with probability. Prediction-market contracts pay one dollar on the stated outcome and nothing otherwise, which makes them a cleaner probability read and a considerably thinner one, since the open interest is a fraction of the futures market's.
Neither number is a forecast of what the Fed will do. Both are the price at which someone was willing to take the other side.
How the contract settles
The contract's own resolution language specifies that it settles "based on the change to the federal funds target rate range, measured in basis points, announced by the Federal Open Market Committee at the September 2026 meeting, as reported by the Source Agency," with an explicit fallback if the committee cancels or delays. No volume or open-interest figure is displayed on the contract page.
Why this matters beyond today
The venues offering these contracts are the same ones defending their right to exist in four federal courts. Macro event contracts on Fed policy have not been the subject of the state-law challenges, which have focused on sports, but the preemption question in front of the Supreme Court governs the whole category.
A market pricing the Fed at 86 cents is also, indirectly, a market pricing its own continued legality.
# EQUITY MARKETS