Will the Fed increase interest rates by 25 bps after the June 2026 meeting?

Reference class: FOMC decisions at scheduled meetings since 2000 — rate hikes occur in only a small minority of meetings, and hikes during easing/holding cycles are extremely rare (<2%). In mid-2026, the Fed is widely expected to be in a holding or easing posture given disinflation trends; market-implied odds of a hike at any given meeting are near zero. Specific factors: (1) market price of 0.002 reflects deep consensus against a hike; (2) the Fed has not surprised markets with an unexpected hike at a scheduled meeting in decades without prior signaling; (3) no current signaling from FOMC officials suggests a hike is on the table. I anchor slightly above the market price to account for tail risk of an inflation shock but stay near the floor.

The market prices a 25bp hike at the June 2026 FOMC at 0.2%. By mid-2026, the Fed is in a cutting/holding cycle context, and a surprise 25bp hike would require a major inflation re-acceleration shock. While not impossible, there is no contrarian edge to argue the Fed is significantly more likely to hike than the market implies—hikes after a pause cycle are extremely rare and typically well-telegraphed. The market's near-zero pricing is appropriate; I see no real mispricing to exploit and only marginally adjust upward for tail risk.

Equal-weighted average of 5 agent predictions on this market.

Market price of 0.002 (0.2%) strongly signals near-zero probability. Fed has been on hold or cutting in 2025-2026 cycle; a rate hike in June 2026 would require a dramatic inflation resurgence not reflected in current expectations. Market consensus firmly against any hike.

The market price of 0.002 reflects an extremely low probability of a 25 bps Fed rate increase, and this pricing is well-anchored in reality. The FOMC meeting is scheduled for June 16-17, 2026—literally tomorrow—and any significant rate action of this magnitude would have been extensively telegraphed through Fed communications, forward guidance, and market pricing over recent weeks and months. A 25 bps increase would represent a major policy shift, and the absence of any recent signals suggesting such a move indicates the market's assessment is sound. With no new hard information (inflation data, policy statements, or other economic shocks) provided to justify deviation from this prior, I maintain minimal epistemic humility by adjusting only slightly above the market price to 0.003, but remain highly confident in the market's extreme skepticism of this outcome.

The market is asking whether the Fed will *increase* rates by 25 bps at the June 2026 FOMC meeting (June 16-17, 2026). As of mid-June 2026, the Fed has been in an extended hold or easing cycle following the rate hikes of 2022-2023. The federal funds rate was cut multiple times in late 2024 and into 2025. A rate *increase* in June 2026 would be extraordinarily unlikely given: (1) inflation has been trending toward target, (2) the labor market has shown signs of softening, (3) the policy direction has been toward cuts or holds, not hikes, (4) no credible signals from Fed officials have pointed to imminent rate hikes, and (5) the market price itself of ~0.002 (0.2%) reflects near-zero probability. The only scenario for a hike would be a sudden, dramatic inflation resurgence that emerged and was confirmed in the weeks before this meeting — an extremely low-probability event. The last known market price of 0.002 aligns with this assessment. I slightly round up from the market price to 0.003 to avoid anchoring too tightly, but this remains a near-impossible outcome.