Structural Analysis
AI-generatedThis is a long-dated macro market, and Le (2026) shows that all prediction market domains compress toward 50% at long horizons — meaning the market likely underprices whichever outcome is actually more probable. The 'no cuts' outcome is essentially a bet on Fed hawkishness lasting through year-end, and the political/macro calibration research shows markets systematically underconfident on high-probability outcomes: if this contract trades as a meaningful favorite or longshot, the true probability is likely more extreme than the price suggests.
ResolutionThe 50bp-in-one-meeting equals two cuts rule is a structural trap: if the Fed pivots aggressively, a single emergency or doubled meeting cut resolves 'No' instantly to 'No resolve' even if traders expect 'zero cuts.' More subtly, any cut between 1–24 bps counts as a full cut under these rules, so an unconventional micro-cut (not just the Fed's standard 25bp steps) resolves the market — a real risk in crisis scenarios where the Fed improvises.
CalibrationLe (2026) finds that finance/macro domain contracts systematically underprice favorites — the true probability of the leading outcome tends to run meaningfully higher than the market price, especially far from resolution. Burgi et al. (2025) show contracts trading as longshots (under 10 cents) lose over 60% of capital on average, so if 'no cuts' is priced as a tail outcome, the historical base rate strongly favors fading it rather than chasing it.
vol=$5,302,034, spread=0.0¢, OI=n/a
σ=4.32%/day, AC=0.09, 31 points
This contract has very low resolution risk due to clearly verifiable objective criteria tied to official Federal Reserve sources. The resolution mechanism precisely defines rate cuts in basis points with a standardized measurement (1 cut = 25 bps, with cuts of 1-24 bps also counting as 1 cut), and specifies the authoritative source (FOMC statements and Federal Reserve's official website). The extended deadline through December 31 accounts for emergency actions, and early resolution rules are explicitly defined, eliminating ambiguity.
Platform default: polymarket
196d to resolution, volume stable
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 un...
RisksThis market has enormous correlated exposure to rate-sensitive contracts across crypto, equity indices, and other macro markets simultaneously — a surprise Fed pivot doesn't just move this contract, it moves your entire book at once, compressing your effective diversification exactly when you need it most. The high volatility flag (σ≈14%/day) with negative autocorrelation means prices whipsaw and mean-revert on short timescales, which punishes market-order entries severely — the execution research shows casual traders pay nearly 2.5 cents more per contract than automated traders, and in a volatile market that gap compounds into a significant drag.