Markets have significantly scaled back expectations for Federal Reserve rate cuts, with Kalshi pricing indicating only a 50% probability of any reduction before 2027, down from 80–90% earlier in the year. This repricing reflects stronger-than-expected economic data and persistent inflation, which are reducing market appetite for near-term monetary easing and reinforcing a higher-for-longer rate stance. The diminished cut odds support the US Dollar by maintaining favorable yield differentials and reducing downward pressure on Treasury yields. As a result, the USD has found support against major counterparts, particularly in environments where other central banks are more clearly dovish. Traders will focus on the upcoming PCE inflation report and Fed dot plot revisions for confirmation on whether this hawkish repricing is sustained.
MARKETS SLASH FED CUT ODDS TO COIN FLIP BEFORE 2027 Kalshi pricing now shows only a ~50% chance of any Fed rate cut before 2027, down sharply from 80–90% earlier this year.
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