Scan: Will the Fed increase interest rates by 25 bps after the December 2026 meeting?

date	predicted	market price	confidence
2026-08-28	38%	48%	48%
2026-08-21	20%	28%	52%

1. Planner Fable 5.1 · Fermi decomposition + tool plan

Tools chosen: polymarket_direct polymarket_related kalshi_related fred claude_news gdelt_news code_execution

Sub-questions (Fermi decomposition)

What is the current target federal funds range and what has the FOMC done at each 2026 meeting so far (cuts, holds, or hikes)?
What do fed funds futures / CME FedWatch currently imply for the December 2026 meeting, specifically the probability of a hike vs hold vs cut?
What are the latest readings of core PCE/CPI inflation and the unemployment rate relative to the Fed's 2% target and its projections, and are they trending toward tightening pressure?
What did the most recent FOMC statement, minutes, and Summary of Economic Projections (dot plot) signal about the policy path through year-end 2026 — any dissents favoring hikes?
Have Fed Chair or other FOMC officials publicly discussed the possibility of rate increases, or is the debate framed as pace of cuts vs holding?
Historically, how often has the FOMC hiked within 12 months of its last cut, and what conditions preceded such pivots?

Planner reasoning

This is a Polymarket question on whether the FOMC hikes 25bps at its December 8-9, 2026 meeting. The key drivers are the current fed funds level and trajectory (are we in an easing or tightening cycle), inflation and labor data, FOMC communications (dot plot, minutes), and market-implied probabilities. Hikes are historically rare shortly after cuts, so the base rate is low unless inflation has re-accelerated; the market price is the primary anchor and cross-venue Kalshi pricing is an independent check.

2. Research Parallel tool calls

tool	status	time	items	summary
polymarket_direct	OK	0.2s	1	## This Market's Polymarket Data Will the Fed increase interest rates by 25 bps after the December 2026 meeting? - Current price (probability): 44.00% - 7-day price change: -4.50% - 30-day price change: +14.50% - Total volume: $138,524 (USD notional) - Price range: 25.50% - 48.50% - Data points
polymarket_related	OK	2.8s	6	Scanned 100 active Polymarket markets, kept 6 matches. keyword 'fed decision december': 0 markets \| keyword 'fed interest rates': 5 markets \| keyword 'FOMC': 1 markets
kalshi_related	OK	2.7s	2	2 related markets / summaries. series KXFED: 0 markets (skipped 87 no-signal) \| series KXFEDDECISION: 0 markets (skipped 60 no-signal) \| keyword 'fed rate december': ok \| keyword 'fed hike': ok
fred	OK	4.0s	6	Fetched 6 FRED series (lookback=400d).
claude_news	OK	23.5s	14	## Key Findings: Fed Policy & December 2026 Meeting Outlook - Current rate & recent trajectory: The fed funds target range has been held at 3.50%–3.75% since October 2025, with the FOMC keeping the benchmark rate at its lowest level since November 2022 for the fifth meeting in a row, votin
gdelt_news	OK	194.1s	20	GDELT: 20 articles across 3 queries (lookback=45d). 'Fed rate hike December 2026': 10 hits \| 'FOMC December meeting rate increase': error GDELT rate-limited after retries (429) \| 'Powell inflation rate hike': 10 hits
code_execution	OK	71.3s	0	Historical FOMC base-rate analysis (reconstructed meeting-by-meeting decisions, 1990–2025, ~296 meetings, ~8/year) - Unconditional per-meeting hike frequency: 51/296 meetings → ≈17.2% chance the FOMC raises rates at any randomly chosen meeting. - **(a) Conditional on a rate cut within t

3. Evidence Brief Sonnet 5 · 6059 chars

# Current state The Fed funds target range has been held at 3.50%–3.75% (upper bound 3.75%) since roughly October 2025, following an easing cycle (confirmed via FRED DFEDTARU). The Sept 15–16, 2026 meeting (whose outcome is not yet known in this data as of early Sept 2026) is the immediate swing factor for the Dec 8–9, 2026 decision this market resolves on. # Timeline of key events - 2025-10 (confirmed, FRED): Range held at 3.50–3.75% after prior cutting cycle. - 2026-05-22 (confirmed): Kevin Warsh sworn in as Fed Chair, replacing easing-bias tone. - 2026-06 (reported, Bondsavvy): June SEP/dot plot split — 3 participants project 1 hike, 5 project a half-point of hikes by year-end 2026; 9 project at/below current range. - 2026-07-28/29 (confirmed, Fed minutes): FOMC holds at 3.50–3.75%, votes 9-3; three dissenters wanted a 25bp hike — first overt hawkish minority. - 2026-08-07 (reported, CNBC): Sept hike odds fall sharply after weak July jobs report. - 2026-08-19 (reported, Forbes): Minutes suggest hikes likely unless inflation improves. - 2026-08-28 (confirmed, multi-outlet): Jackson Hole — Warsh signals hikes may be needed; Sept hike odds jump to ~coin flip (from ~1/3). - 2026-08-31 (reported, CNBC/Marketplace): CME FedWatch ~66% Sept hike probability, ~50% Dec hike probability. - 2026-09-03 (reported, Axios): Governor Waller pushes back, cites two months of improving inflation, urges patience. - 2026-09-04 (reported): Trump publicly demands lower rates after strong August jobs report. # Event Will the Fed raise the target fed funds upper bound by 25bps following the December 8–9, 2026 FOMC meeting? # Outcomes to forecast Yes (25bp hike) / No (hold, cut, or other change rounding away from +25bp) # Kalshi market anchor No direct Kalshi YES price was returned for this ticker (kalshi_related only surfaced unrelated long-dated "fed funds rate at end of year" markets, not this contract). **Best available cross-market proxy: Polymarket price 44%** (down 4.5pp over 7 days, up 14.5pp over 30 days; range 25.5%–48.5%; $138.5K volume, 38 data points) — treat as anchor substitute with caution. # Sub-question answers 1. **Current range & 2026 path**: 3.50–3.75% (upper bound 3.75%), unchanged since Oct 2025. July 29, 2026 meeting: held, 9-3, with 3 dissents favoring a hike (Fed minutes). No hikes have occurred yet in 2026. 2. **Futures/FedWatch**: Late Aug 2026 CME FedWatch: ~66% probability of a Sept hike, ~50% probability of a Dec hike (Marketplace/CNBC). Polymarket implies ~44% for Dec hike currently. 3. **Inflation/labor**: Core PCE (PCEPILFE) up from 126.71 (Aug 2025) to 130.66 (Jul 2026), ~3.1% YoY — above 2% target. CPI up ~2.6% YoY. Unemployment eased to 4.1% (Aug 2026) from 4.3-4.4% earlier in 2026, though a weak July payrolls report briefly cut hike odds (FRED, CNBC). 4. **FOMC signals**: June SEP split (3 see 1 hike, 5 see half-point, 9 see at/below current). July statement held with 3 hawkish dissents. August minutes (per Forbes) suggest hikes likely unless inflation falls. 5. **Officials' rhetoric**: Chair Warsh (sworn in May 2026) explicitly floated hikes at Jackson Hole (Aug 28). Waller countered citing improving inflation (Sept 3). Debate has shifted from "pace of cuts" to overt hike-vs-hold, a structural change from pre-2026 framing. Trump is publicly pressuring for lower rates (political headwind against hikes). 6. **Historical base rates** (code_execution, 1990–2025): Unconditional per-meeting hike rate ~17.2%; December-specific ~20%. Conditional on a cut within the prior 12 months (current regime), hike rate historically only ~3.4%. Active hiking cycles show ~61% persistence, but the Fed is not currently in one. # Key facts (high-confidence, factual) 1. [FRED] Fed funds upper bound = 3.75% as of Sept 2026, unchanged since Oct 2025. 2. [Fed minutes] July 29, 2026: hold, 9-3 vote, 3 dissents for 25bp hike. 3. [Fortune/multi] Warsh (Chair since May 2026) signaled hike possibility at Jackson Hole, Aug 28, 2026. 4. [CNBC/Marketplace] CME FedWatch: ~50% Dec 2026 hike probability as of late Aug 2026. 5. [FRED] Core PCE inflation trending near/above 3% YoY through July 2026; unemployment 4.1% (Aug 2026). 6. [code_execution] Historical hike probability conditional on recent cut ≈3-6%, far below current market-implied odds. # Cross-market signals - Kalshi related: No directly matching Dec-2026 hike/hold market found; long-dated year-end rate-level markets (2034-36) show rising rate-hike-adjacent pricing but are not directly comparable. - Polymarket: This exact market at 44% YES (down 7d, up 30d). Sibling Sept-2026 market: "increase 25bps" priced ~50.5%, "no change" ~48.5%, suggesting market sees Sept as coin-flip, with Dec slightly less likely than Sept. - Sportsbook implied: N/A (not applicable to Fed markets). # Analyst opinions and speculation - Goldman Sachs argues markets are "too hawkish" on hike bets (Aug 17, 2026). - Fool.com (Jul 22) predicted "the Fed hikes once in 2026." - Claude_news synthesis: Dec outcome highly contingent on Sept meeting result and Oct/Nov data; genuine uncertainty. # Directional lean per outcome - **Yes (hike)**: Supported by hawkish Chair Warsh, growing dissent bloc, above-target core inflation, ~50% FedWatch Dec probability, Polymarket 44% (up sharply 30d). - **No (hold/other)**: Supported by historical base rate (~3-6% post-cut-cycle), doves (Waller) citing improving inflation, weak July jobs data, political pressure from Trump, Polymarket implies majority (56%) No, and 7-day Polymarket trend declining. # Gaps / unknowns - No direct Kalshi YES price captured for this specific ticker — anchor relies on Polymarket proxy. - Sept 15–16, 2026 meeting outcome (pivotal precondition) not yet known in this dataset. - No Oct/Nov 2026 data or post-Sept FedWatch update available. # Calibration anchors - Polymarket proxy: 44% YES (declining short-term, rising medium-term). - CME FedWatch (late Aug 2026): ~50% Dec hike probability. - Historical base rate post-cutting-cycle: ~3-6%; unconditional/Dec-specific: ~17-20%.

4. Forecasters Fable 5.1 + GPT-5.6 Sol · in parallel

claude-fable-5-1

42% conf

Yes	40%
No	60%

No direct Kalshi price exists; the Polymarket proxy sits at 44% YES (falling over 7 days) and late-August CME FedWatch implied ~50% for a Dec hike, though FedWatch figures are typically cumulative and this contract requires a 25bp move at the December meeting specifically — if Warsh's Fed hikes in September or October, a December pause becomes plausible, diluting the specific-meeting odds. Hawkish drivers are real (Warsh's Jackson Hole signal, 3 July dissenters, core PCE ~3.1%), but Waller's pushback on improving inflation, Trump's public pressure for lower rates, and Goldman's 'too hawkish' call argue against. The historical base rate for a hike within 12 months of a cut (~3-6%) is far below market pricing, warranting a modest shade below the proxy. I land at ~40% YES, slightly under the Polymarket anchor.

gpt-5.6-sol

57% conf

Yes	43%
No	57%

The 44% Polymarket proxy is the best available anchor, while late-August FedWatch pricing near 50% corroborates substantial hike risk. A 9-3 July vote with three hike dissents, Chair Warsh’s hawkish signaling, core PCE near 3.1%, and unemployment at 4.1% all support Yes. However, the Fed is not yet in an active hiking cycle, the post-cut historical hike rate is only about 3-6%, and Waller’s caution plus improving inflation and political pressure favor No. I therefore stay close to the market anchor but shade Yes slightly lower given the unresolved September decision and missing October-November data.

5. Devil's Advocate Sonnet 5 · red-team critique

Both forecasters anchor almost entirely on the 44% Polymarket proxy without adequately reconciling it with the historical base rate (~3-6% conditional on a recent cut cycle), which is off by nearly an order of magnitude — neither explains why they trust the market price so heavily over this strong reference-class signal beyond a token "shade down."

Neither forecast explicitly models the conditional/path-dependency structure highlighted in the brief: if Sept hikes, Dec probability likely falls (pause after move); if Sept holds, Dec probability could rise (pressure builds) or fall (dovish momentum continues). Both mention this qualitatively (F1 slightly more) but neither produces a decomposed P(Dec hike | Sept outcome) estimate, which is the single biggest identified uncertainty in the brief.

Both cluster very close together (0.40 vs 0.43) with no real diversity of view, likely reflecting anchoring bias to the single Polymarket data point rather than independent synthesis of the mixed evidence (FedWatch ~50%, Polymarket 44%, base rate 3-6%, hawkish dissents vs dovish pushback).

Neither adequately addresses the "other" outcomes bucket (25bp cut or larger move) explicitly — the No bucket is treated as monolithic "hold" when the brief defines No as "hold, cut, or other," and given Trump's political pressure and a weak jobs report, a cut scenario deserves distinct probability mass rather than being folded silently into No.

Both forecasts note Goldman's "too hawkish" call and Waller's dovish pushback as reasons to shade down, but neither weighs the countervailing structural regime shift (Warsh replacing dovish leadership, first hawkish dissent bloc since the cutting cycle began) as evidence the base rate itself may be a poor reference class this cycle — this tension is acknowledged but not resolved in either rationale.

Neither forecaster flags the significant data gap (no Sept meeting outcome, no Oct/Nov data) as grounds for wider uncertainty bands or a check on overconfidence; both present fairly narrow, market-hugging point estimates despite the brief's explicit "genuine uncertainty" framing from the Claude_news synthesis.

6. Aggregator Fable 5.1 · final calibrated forecast

40% (50% confidence)

Yes: 40% No: 60%

Both forecasts cluster near the Polymarket proxy (44%), and the critique's main valid point is that the FedWatch ~50% figure is cumulative and does not map to a hike at the December meeting specifically. Decomposing the path: if the Fed hikes in September (roughly coin-flip to ~60% odds), a December pause becomes quite plausible given Waller's pushback and Trump pressure, perhaps 35-45% for a second December move; if it holds in September, December hike odds are similar or slightly lower as dovish momentum builds. Either branch yields roughly 38-42% for a December-specific 25bp hike, consistent with the declining 7-day Polymarket trend. The historical post-cut base rate (~3-6%) is a weak reference class given the structural regime shift (hawkish Chair, three-dissent bloc, core PCE ~3.1%), so I do not pull far below the market. Final: 40% Yes.

Pipeline Timing

Total pipeline time: 306.8s

Per-tool research timings shown in the Research section above.