Will the Fed Raise Rates Tomorrow?
Prediction markets say ~84%. ProbGap puts the probability at 94%.
The Federal Reserve delivers its September rate decision tomorrow — and markets have moved sharply toward a hike.
Prediction markets currently put the probability of a 25 basis point rate increase at roughly 84%.
ProbGap forecast: 94%
Gap: +10 percentage points
That is a meaningful disagreement this close to resolution.
Why ProbGap is higher
The case for a hike has strengthened considerably over the past week.
U.S. inflation data have remained hotter than the Fed would like, while rising energy prices are adding another source of inflation pressure.
At the same time, expectations across traditional financial markets have moved even further toward a hike. Fed futures are now pricing the probability at roughly 92–94%.
Several major Wall Street institutions have also shifted their forecasts toward a September increase, including Goldman Sachs, J.P. Morgan and Morgan Stanley.
Taken together, the evidence suggests prediction markets may still be slightly too cautious.
The ProbGap
Market probability: ~84%
ProbGap forecast: 94%
Probability gap: +10 pp
Our view is therefore straightforward:
The probability of a 25bp Fed hike is higher than prediction markets currently imply.
The market resolves tomorrow.
Forecast recorded: September 15, 2026
Resolution: September 16, 2026
Outcome tracked: Federal Reserve raises its target rate by 25 basis points