Will the Fed increase interest rates by 25 bps after the January 2027 meeting?

- [2025-09-05] The Fed's official (tentative) 2027 FOMC schedule confirms the meeting relevant to this contract is Tuesday, January 26 – Wednesday, January 27, 2027, with the rate decision due at 2:00 p.m. ET on the 27th. The Federal Reserve has published its tentative 2027 FOMC meeting schedule with the first meeting on Tuesday, January 26, and Wednesday, January 27, 2027. Source: mnimarkets.com / federalreserve.gov. - [2026-09-16] The FOMC, under Chair Kevin Warsh, raised the target range 25bp to 3.75%–4.00% in a 12-0 vote — the Fed's first hike since 2023, reversing the prior easing cycle. The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent...Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. Source: federalreserve.gov press release (monetary20260916a.htm). - [2026-09-16] The accompanying dot plot showed a split committee for 2027: at this week's meeting, 2027 was a fairly close call, with eight officials pointing to another hike, six seeing the funds rate holding steady and four envisioning cuts. Source: cnbc.com. - [2026-09-16] Per Schwab's summary of the SEP, the median end-2027 dot moved up to 4.1% (implying roughly one more 25bp hike from the new 3.75-4.00% base by end-2027), though this isn't likely to be "one-and-done" for hikes but also probably won't be the start of an extended hiking cycle. Only eight dots project another 25 basis points in 2027. Source: schwab.com. - [2026-09-16] Fidelity's read of the same SEP found the dot plot showed that the median of FOMC members expects 1 additional rate hike in 2026, and no cuts or hikes in 2027 — sources diverge slightly on whether the median 2027 dot implies zero or one further move, underscoring genuine committee division rather than a clear consensus for January 2027 specifically. Source: fidelity.com. - [2026-09-23/25] Post-meeting market pricing shifted hawkish: the dollar rose to a nearly two-month high, as Federal Reserve rate hike expectations were boosted by hot U.S. data, and bond markets saw a broad selloff amid "hawkish Fed signals." Source: investing.com. - [2026-09-25] Futures-market aggregator StreetStats reported the current effective federal funds rate is 3.88%...futures markets are pricing the rate to rise to about 4.2% by December and reach roughly 4.8% by September 2027, reflecting expectations for further policy tightening amid persistent inflation and resilient growth. This implies markets see further hikes distributed across late 2026 and into 2027, though not necessarily concentrated at the January meeting specifically. Source: streetstats.finance. - [2026-09-27/28] A separate OIS-based tracker (centralbank.watch) put the probability of a 25bp hike at the very next meeting (October 28, 2026) at 65%, a figure it stresses is cumulative pricing for "higher than today's level by that meeting date." Source: centralbank.watch. - [2026-09-16] The next scheduled FOMC meeting before January 2027 is October 27-28, 2026, followed by December 8-9, 2026 (the last pre-January SEP/dot-plot meeting); both will materially shape the trajectory heading into the January 26-27, 2027 decision. The next FOMC meeting is October 27 –28, 2026. Source: fedratecalc.com. - [2026-09-16] Context: the current 3.75%-4.00% range followed a 2025 easing cycle that brought rates down to 3.50-3.75% by December 2025, i.e., the Fed went on a similar path in 2025, holding rates steady until September where they then issued three consecutive cuts to bring the FFR to a target range of 3.50%-3.75% before raising rates again in September 2026 to its current range of 3.75%-4%. Source: advisorperspectives.com. - [2026-09-28] A commercial rate-probability dashboard (rateprobability.com) displayed inconsistent/stale-looking cached data (referencing a "Jan 28, 2026" meeting and rate cuts) that contradicts the confirmed hiking narrative from primary/press sources; this tool's Jan-2027-specific pricing could not be reliably read and should not be treated as current market pricing for this contract. Source: rateprobability.com. NOT FOUND: A CME FedWatch-style probability figure specifically for the January 27, 2027 FOMC meeting (as opposed to October/December 2026) was not located in available search results; most trackers only show reliable pricing out to the October and December 2026 meetings, with 2027 pricing being directional/aggregated rather than meeting-specific. BOTTOM LINE: As of September 28, 2026, the Fed just resumed hiking (25bp to 3.75%-4.00% on Sept 16, 2026) after new Chair Kevin Warsh cited persistent above-target inflation, and the September dot plot shows a genuinely split committee on 2027 (roughly even between another hike, a hold, or cuts), with two more meetings (Oct 28 and Dec 9, 2026) and fresh data due before the January 26-27, 2027 decision that will determine whether a 25bp hike materializes at that specific meeting.

- [2026-09-16] The Fed raised its target range by 25bp to 3.75%–4.00% at the September meeting, its first hike since 2023, in a unanimous 12–0 vote, marking a resumption of tightening after cuts in Sept-Dec 2025. The Federal Open Market Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm - [2026-09-16] Base-rate context: this is the first Fed hiking cycle since 2022-23; historically, once a hiking cycle starts the Fed has often (but not always) continued for several consecutive meetings, though this cycle looks shallow — J.P. Morgan Global Research forecasts another quarter-point raise in December, but does not expect a longer-term hiking cycle. https://www.jpmorgan.com/insights/global-research/economy/fed-rate-cuts - [2026-09-16] The September dot plot (SEP) showed the median federal funds rate for year-end 2026 at 4.1%, implying one additional 25bp increase after this meeting, with medians staying at 4.1% for 2027 , i.e., the median official projection implies a pause through January 2027 after one more 2026 hike, not a further hike at the January 2027 meeting itself. https://www.kucoin.com/blog/september-2026-fomc-fed-hikes-25-bp-hawkish-dot-plot-is-this-a-new-hiking-cycle - [2026-09-16] Dispersion among officials is wide for 2027: the dot plot for 2027 showed all but four voters expecting higher rates than now by the end of next year, with more expecting two hikes than one, while three expected one cut and one expected several cuts by year-end 2027. This implies no consensus that a hike specifically lands at the January 2027 meeting versus other 2027 meetings. https://www.schwab.com/learn/story/fomc-meeting - [2026-09-16] Market pricing (per Lord Abbett, citing Bloomberg) diverges from the median dot: markets are pricing a more aggressive path — fed funds futures currently imply roughly three additional 25bp hikes over the next year, considerably more tightening than the median FOMC projection. https://www.lordabbett.com/en-us/institutional-investor/insights/markets-and-economy/2026/september-fed-meeting-from-signals-to-action.html - [2026-09-25] A third-party futures-derived model (Central Bank Watch, ~97% alignment claimed with CME FedWatch) puts the market-implied probability of a fresh 25bp hike specifically at the January 27, 2027 meeting at 53.1%, with cumulative probability the rate is higher than today's level by that date at 96.7% (reflecting hikes priced for October/December already occurring first). https://centralbank.watch/federal-reserve/ - [2026-09-25] The same tracker shows front-loaded hike odds: 65.4% for an October 28, 2026 hike and 79.6% (fresh move) for the December 9, 2026 meeting, meaning much of the tightening path is expected to be delivered before January, reducing (but not eliminating) the chance of a hike specifically being the January decision. https://centralbank.watch/federal-reserve/ - [2026-09-17] Deutsche Bank's read of individual dots found a split heading into 2027: eight officials favored 75bp of total tightening through 2027 versus six supporting 50bp, though only two voting officials were in the more hawkish group, five voters were in the 50bp camp, and four voters anticipated some easing in 2027. https://finance.yahoo.com/economy/policy/articles/fed-september-2026-dot-plot-144727873.html - [2026-06-17] Prior to the hiking pivot, the Fed had held rates for four straight meetings ( the Federal Reserve left the federal funds rate unchanged at 3.50%-3.75% on June 17, 2026, the fourth consecutive hold, fully priced by markets ), showing the base rate of "no move" has been the norm this cycle before September's surprise pivot. https://finance.yahoo.com/economy/policy/articles/warsh-hawkish-shock-9-fed-180221394.html - [2026-08-31] Market probabilities for the September hike itself moved quickly on Fed communication: traders of fed funds futures saw a 60.4% chance of a quarter-point hike in September, up from around 56% on Friday, according to the CME's FedWatch tool. This illustrates how volatile these meeting-specific odds can be over just days, cautioning against over-reliance on any single snapshot for January 2027, four months out. https://www.cnbc.com/2026/08/31/jackson-hole-fed-chair-kevin-warsh-hawkish-rate-hikes-analysts.html - [2026-09-16] Analyst base-rate view: Charles Schwab's post-meeting analysis concluded this isn't likely to be "one-and-done" for hikes but also probably won't be the start of an extended hiking cycle, as only eight dots project another 25 basis points in 2027. https://www.schwab.com/learn/story/fomc-meeting BOTTOM LINE: The reference class here is a nascent, historically unusual mid-cycle hiking resumption (first hike since 2023) rather than a well-established cutting or hiking streak; official median guidance points to a pause by January 2027 after one more 2026 hike, while futures markets and some banks price a more aggressive path (roughly 3 more hikes over the next year) — third-party futures models put the market-implied odds of a fresh hike specifically at the January 2027 meeting near 50-55%, well below certainty and with much of the expected tightening front-loaded into October/December 2026. NOT FOUND: No long-run historical base rate specifically for "probability Fed hikes at a given meeting following two prior hikes in same cycle" was available; no official Fed forecast (only market-based/analyst estimates) exists for the January 2027 meeting specifically; could not access original CME FedWatch page directly (paywalled/dynamic) beyond secondary trackers.

YES means: the FOMC's statement following the January 26–27, 2027 meeting announces a 25 bps increase in the upper bound of the target federal funds range versus the level set after the September 2026 meeting (i.e., a hike is delivered specifically at, or effectively locked in by, the January 2027 decision). - [2026-09-16] The Fed already broke a multi-year hiking taboo by unanimously raising rates 25bp to 3.75-4.00% at the September meeting, and Chair Warsh explicitly framed the move as merely removing "a dose" of accommodation rather than a one-off tightening, language Wall Street economists read as leaving the door open to further, potentially open-ended, hikes: "Warsh's framing, if taken literally, raises the possibility that rates might have to keep going up until financial conditions...are no longer 'accommodative'" (https://www.cnbc.com/2026/09/18/three-words-from-kevin-warsh-have-wall-street-wondering-how-far-the-fed-will-go-with-rate-hikes.html). - [2026-09-18] In the days immediately after the hike, market-implied odds of a further October increase were already near 58% per CME FedWatch, and Goldman Sachs, Bank of America, JPMorgan and HSBC/Deutsche Bank had all shifted to forecasting at least one more 2026 hike, confirming the tightening path is being extended by consensus Wall Street desks, not just hawkish outliers (https://www.cnbc.com/2026/09/18/three-words-from-kevin-warsh-have-wall-street-wondering-how-far-the-fed-will-go-with-rate-hikes.html). - [2026-09-24] Even Goldman Sachs — previously the most dovish major bank — abandoned its rate-cut call entirely and now forecasts an additional 25bp hike at the October 27-28, 2026 meeting, while CME FedWatch (as cited in that report) priced 53.1% for an October 28 hike and 87.5% for at least one further hike by the December 9 meeting, implying the Fed could enter January 2027 already at 4.25%+ with tightening momentum still intact (https://finance.yahoo.com/economy/policy/articles/goldman-sachs-drops-surprise-call-174700113.html). - [2026-09-16] Fed staff's own dot plot shows persistent hawkish dispersion for 2027, with a Schwab analysis noting the Fed is "unlikely" to be one-and-done given eight of eighteen dots point to another 25bp move in 2027, so even under the median path the probability mass for further tightening is concentrated in the near-term 2027 meetings, of which January is the first (https://www.schwab.com/learn/story/fomc-meeting). - [2026-09-11] The most recent hard CPI data cited by PNC show inflation still running hot into the September decision — headline CPI up 0.4% in August with "odds of a Fed rate hike increased to around 90% following this morning's inflation report" — and PNC's own headline flagged "more hikes to follow," directly supporting a mechanism (persistent above-target inflation prints continuing into Q4 2026/January 2027) for a further January move (https://www.pnc.com/content/dam/pnc-com/pdf/aboutpnc/EconomicReports/EconomicUpdates/2026/PNC_Economics_Research_CPI_11_September_2026.pdf). - [2026-08-28] Chair Warsh's Jackson Hole speech, delivered before the pivot, explicitly said the Fed "may have to raise interest rates in the coming months to bring [inflation] down," and Capital Economics wrote his remarks left "the door open to a hike earlier than our current forecast of December, if the forthcoming price data are firm" — showing the chair himself has signaled a bias toward sequential hikes rather than a single adjustment (https://fortune.com/2026/08/28/federal-reserve-chair-kevin-warsh-raising-interest-rate/). - [2026-09-18] A former Boston Fed president, Eric Rosengren, publicly stated on CNBC it would be "appropriate to have another 25 bps hike in 2026," reflecting an emerging expert consensus (beyond FOMC insiders) that the tightening cycle should continue past September, which — if realized at October/December — sets a hawkish trajectory heading into January (https://www.cnbc.com/2026/09/18/three-words-from-kevin-warsh-have-wall-street-wondering-how-far-the-fed-will-go-with-rate-hikes.html). - [2026-09-18] A political-pressure mechanism also exists: President Trump publicly demanded rates near 1% within hours of the September hike, and commentary suggests any perception of political capitulation would be reputationally costly for Warsh, potentially hardening the Committee's resolve to demonstrate independence via continued tightening if inflation data stay firm (https://prediction.com/news/fed-january-2027-hike-odds-hit-34-after-warsh-sep-18-2026). - [2026-09-22] Goldman's own Global Perspectives note (published just before end of September) still assumes the tightening cycle continues at least through an October hike, and Goldman's chief economist explicitly flagged that "market pricing is more hawkish than Goldman's view," underscoring that traders — not just banks — are pricing meaningful risk of tightening extending into early 2027 (https://www.techflowpost.com/en-US/article/34226). - [2026-09-25/28] Cross-checking against colleague-cited third-party trackers (centralbank.watch), the market-implied probability of a fresh January 2027 hike sits around 50-55%, essentially a coin-flip level that is nonetheless dramatically elevated from near-zero just months ago, reflecting how quickly the hiking narrative has taken hold since Warsh's August/September hawkish turn. BOTTOM LINE: The YES path requires only that the still-hot inflation data (3.7% CPI, per the August print) persist through the October 14 CPI release and the October 27-28 and December 8-9 FOMC meetings, sustaining the Warsh-led hawkish momentum that already produced one hike and pushed several major banks (Goldman, BofA, JPMorgan) to forecast a second by December; if that materializes, January 2027 becomes a live "third hike" meeting rather than requiring an entirely fresh catalyst. NOT FOUND: No official Fed communication or FOMC statement specifically committing to a January 2027 hike; no primary CME FedWatch snapshot for the January 27, 2027 contract could be directly accessed (only secondary citations of ~53% probability figures, some possibly conflating October/January meeting-specific pricing).

YES means: the FOMC's statement following the January 26–27, 2027 meeting shows the upper bound of the federal funds target range raised by 25 bps versus its level immediately before that meeting (i.e., a fresh hike specifically delivered at the January meeting, not merely a higher rate carried over from an earlier 2026 hike). - [2026-09-18] Cross-venue prediction-market pricing for a January 2027 hike stood well below even odds — "As of September 18, 2026, prediction markets put the probability of a 25bps hike at the January 2027 FOMC meeting at 34% on Polymarket and 33% on Kalshi, up from 22% just three days earlier." Even after a large post-hike repricing, the market-implied chance of a fresh January move remained a minority view. Source: prediction.com. - [2026-09-18] The same analysis lays out the core NO-case mechanism directly: "the strongest counter-argument is straightforward: the economy may slow enough between now and January to make a second hike unnecessary... There is also the precedent of data dependence... Even if Warsh intended a tightening cycle, weak employment numbers, softening consumer spending, or a credit event could force a hold." Source: prediction.com. - [2026-09-18] The report also notes the Fed's own framework argues against pre-committing to a January hike: "the January meeting sits after holiday-season economic data. Retail sales, housing data, and revised GDP figures for Q3 2026 will all be in hand by then. If the economy shows clear signs of cooling, the hold camp will strengthen considerably." Source: prediction.com. - [2026-09-16] J.P. Morgan's institutional house view (post-hike) explicitly caps the tightening cycle at one more move in December, not January: "J.P. Morgan Global Research forecasts another quarter-point raise in December, but does not expect a longer-term hiking cycle." If realized, that front-loads the expected tightening into the December meeting, leaving January as a natural pause point. Source: jpmorgan.com. - [2026-09-16] Schwab's read of the SEP shows dispersion tilted toward "not much more": "The dot plot for 2027 showed all but four voters expecting higher rates than now by the end of next year. More expected two hikes than expected one. Three expected one cut and one expected several cuts by year-end 2027." A plurality even within the hawkish camp envisions the hiking being spread across the year rather than front-loaded at the very first (January) meeting. Source: schwab.com. - [2026-08-17] Pre-hike house forecasts from Goldman Sachs projected no hikes at all and pushed the Fed's first easing move out to mid/late 2027, i.e., "Goldman Sachs Research has pushed back its forecast for Fed rate cuts to June and December 2027 (from December 2026 and March 2027 previously)." While issued before the September hike and now partly superseded, it illustrates that a credible sell-side house saw no tightening bias for early 2027 as recently as June 2026. Source: goldmansachs.com. - [2026-07-17] Morgan Stanley's pre-hike base case likewise argued for cuts, not hikes, heading into 2027: "We expect a lower inflation trajectory that keeps policy on hold this year, potentially followed by two rate cuts in 2027 as inflation gradually normalizes." This underscores that a meaningful body of professional forecasters saw disinflation risk dominating, a view the January decision could still validate if Q4 data cooperates. Source: morganstanley.com. - [2026-09-16] Historical base-rate/status-quo evidence: earlier in this same policy cycle the Fed demonstrated a strong bias toward holding rather than moving, with the Fed's next three meetings at the time being June, July and September, with investors seeing "less than a 10% chance of a rate cut" at the nearest one , and separately the Fed delivered an expected hold "in its January 2026 meeting, pausing its easing cycle after three consecutive rate cuts." This shows the Committee's institutional default, even mid-cycle, is frequently to pause and reassess after a policy move rather than continue immediately. Source: itiger.com, tradingeconomics.com. - [2026-01-28] Direct January-meeting precedent for pausing after a run of moves: in January 2026 "The Fed left the federal funds rate unchanged at the 3.5%–3.75% target range in its January 2026 meeting, in line with expectations, after three consecutive rate cuts last year." January meetings in this Fed's recent history have specifically been "pause" meetings rather than continuation meetings. Source: tradingeconomics.com. - [Resolution-text mechanism] The contract's own rules build in a status-quo/NO bias at the margin: if the FOMC's statement is delayed or the meeting is disrupted, the market defaults to "No change," and any change must be rounded to the nearest 25bp bracket — meaning a token or ambiguous move (e.g., a delayed or skipped decision) resolves NO rather than YES. This is a structural, not just probabilistic, tilt toward NO in edge cases. Source: Polymarket resolution criteria (as provided in question). - [2025-11 to 2026-02, recurring pattern] Government-shutdown-driven "data fog" has repeatedly forced the Fed into a more cautious, hold-leaning posture in this cycle: during the FY2026 shutdown "The U.S. government shutdown is delaying another major economic report, leaving policymakers at the Federal Reserve with a cloudier picture even as the economy enters a challenging phase of stubbornly persistent inflation and a sharp slowdown in hiring." Should a similar funding lapse or data disruption recur ahead of January 2027, the precedent is for the Fed to lean toward inaction rather than risk a policy error. Source: investmentexecutive.com. - [2026-08-21] Even hawkish-leaning commentary conceded the September hike itself was only "one-in-three" priced days before it happened, illustrating how quickly and how far short of certainty meeting-specific hike odds can sit even close to a decision: "A fizzled Treasury buyback, a 9-3 FOMC dissent vote, and September rate hike odds stuck at one-in-three mean neutral is already priced in." Four months out from January 2027, similar sub-50% pricing patterns should not be read as a strong lean toward a hike. Source: techtimes.com. BOTTOM LINE: Even after the September 2026 hiking pivot, no primary source shows a majority expectation—official (median 2027 dot unchanged from 2026's), market-based (34%/33% cross-venue as of Sept 18), or sell-side (JPMorgan capping the cycle at a December move, Goldman/Morgan Stanley's pre-hike no-hike calls)—for a fresh 25bp increase specifically at the January 27, 2027 meeting; combined with this Fed's repeated pattern of pausing immediately after a policy move (including at January meetings specifically) and a resolution mechanism that defaults to "No change" in ambiguous or delayed-decision scenarios, the weight of evidence favors NO. NOT FOUND: No official Fed communication or primary-source data postdating September 28, 2026 (i.e., from the October or December 2026 meetings) was available to confirm whether the anticipated "one more 2026 hike" actually occurred, which would materially affect the base rate for January; no confirmed news of a government shutdown or data disruption specifically timed before the January 2027 meeting.