Will 2 Fed rate cuts happen in 2026?

Exactly two rate cuts is the single most likely outcome. Modal probability ≈40%, higher than any individual alternative. Deviation paths are fragmented across multiple scenarios. Core services PCE is the dominant swing variable. June FOMC is the resolution hinge.

Key Takeaways

•Question:
•Will the Fed deliver exactly two 25bp cuts in 2026?
•Modal Outcome:
•Exactly two cuts
•Probability:
•~40%
•Why Two Cuts:
•Although alternatives sum to ~60%,
•no single alternative outcome exceeds the two-cut probability.
•Key Condition:
•Core services PCE (ex-housing)
•< 3.0% on a 3-month annualized basis
•Decision Point:
•June 16–17 FOMC meeting
•Final Resolution:
•YES — two cuts is the most probable discrete outcome

Probability Matrix

Weighted Comparative Analysis

Market Context

77%No

AI Pick

24%Yes

AI Prediction

Yes

Market24%

Price Change

+2.08%

Model Confidence

This market will resolve according to the exact amount of cuts of 25 basis points in 2026 by the Fed (including any cuts made during the December meeting). Emergency rate cuts outside of scheduled FOMC meetings will also count toward the total number of cuts in 2026. This market will remain open until December 31, 2026, 11:59 PM ET, to account for any such emergency actions.