Bucket markets vs one book: the Fed's December decision and the 2027 rate

Short answer: Polymarket and Kalshi sell the Fed's Dec 9, 2026 decision as five outcome buckets, and on Oct 29 two of them held almost all the probability: a 25 bp hike at 76.5¢ and no change at 21.5¢ (Polymarket mids; Kalshi 78.5¢ and 19.5¢). A number with two lumpy outcomes has no strike near 50/50, so a book that always pays 2× would be one-sided. Rizon lists the upper bound of the Fed's target range on Dec 31, 2027 instead (FED-2027): one book of strikes between the 25 bp levels, over a horizon long enough to have a middle.

The Fed is a clear example of what bucket markets do to a single number, and of where the horizon contract stops working. This post covers both.

Where the Fed stands (Oct 29, 2026)#

The FOMC met on Oct 27–28 and held the target range at 3.75–4.00%, by 10 votes to 2 (Cook and Hammack dissented in favour of a 25 bp hike), according to the Fed's 2:00 PM statement on Oct 28. The last move was a 25 bp hike on Sep 16, 2026, the first since July 2023. The next meetings are Dec 8–9 (statement Dec 9) and Jan 26–27, 2027.

The upper bound of the range, FRED's series DFEDTARU, since September 2025:

Before Sep 18, 2025 it was 4.50%. The effective rate was 3.88% and the 2-year Treasury yield 4.70% on Oct 27.

December, as the venues sell it#

Polymarket's December market (fed-decision-in-december, $7.47M traded, $2.34M of it in the last 24 hours) and Kalshi's (KXFEDDECISION-26DEC) each have five outcomes:

Kalshi also lists the level directly, as "upper bound above" strikes (KXFED-26DEC):

And the same path of the same rate is sold again in other buckets: the rate at the end of 2026 (Polymarket: 3.75% at 1.25¢, 4.00% at 15.95¢, 4.25% at 78.05¢, 4.5% or more at 2.9¢), the number of hikes in 2026 (two at 78.5¢), the number of cuts in 2026 (none at 96.9¢, $55M traded), and January's decision (no change at 66.5¢, a hike at 30.5¢). Counting both venues, that's at least 25 separate books on the same rate's next few steps.

Why December can't be 50/50#

A horizon book needs a strike that splits the outcome in two. December's outcome moves in 25 bp steps: the upper bound will be 4.00% (no change, about 21.5¢), 4.25% (a hike, about 76.5¢) or, rarely, something else. A strike between them, at 4.125%, is a contract on "hike or not": Higher is worth about 79¢ (the 25 bp hike plus the larger one), Lower about 22¢. At a fixed 2×, no one takes Lower at that strike, and no strike sits closer to the middle, because nothing lies between 4.00% and 4.25%. The book would be one-sided until the meeting.

That's the general limit: a horizon contract needs a number whose outcome spreads over enough values to have a stable middle. Two lumpy outcomes don't have one.

The rate at the end of 2027: one book#

Over a longer horizon the same number does spread out. Between Oct 29, 2026 and Dec 31, 2027 the Fed meets in December and through all of 2027, and each meeting can move the range by 25 bp or more, so the outcome can spread across several levels instead of piling onto one.

Rizon's FED-2027:

We didn't record the prices of the 2027 analogs on Oct 29, so this post doesn't quote them. Even over 14 months the number still moves in 25 bp steps, so the 50/50 point usually falls between two strikes and the best Higher and Lower quotes straddle it; the book's midpoint is the forecast, in percent.

Buckets vs one book: saying one thing#

Suppose your view is "the upper bound ends 2026 at 4.25% or higher". On Polymarket's end-of-2026 market that's two buckets, 4.25% (78.05¢) and 4.5% or more (2.9¢), each with its own book and spread, about 80.95¢ at the mids. "Above 4.25%" is the one bucket at 2.9¢. "Between 4.00% and 4.25%" is two again. Every view is a different combination of separate markets.

A strike book on the same number would say each of those in one contract: Higher than 4.125% is "4.25% or higher", Higher than 4.375% is "above 4.25%", always at 2×, all in the same book. Kalshi's "above" ladder is closer to this, one contract per strike, but each strike is still its own market with its own book and its own price in cents.

More on why one book at 50/50 suits a trader with an edge in Why every market on Rizon is 50/50, and on the whole idea in the manifesto.

FAQ#

What is the Fed's rate now?#

The target range is 3.75–4.00% after the Oct 27–28, 2026 meeting held it. The upper bound, 4.00%, is the value of FRED's DFEDTARU series.

When is the next Fed decision?#

Dec 9, 2026, at the end of the Dec 8–9 meeting, then Jan 26–27, 2027.

What did prediction markets price for December on Oct 29, 2026?#

A 25 bp hike at about 76.5¢ on Polymarket (77–80¢ on Kalshi) and no change at about 21.5¢ (19–20¢ on Kalshi), with cuts and larger hikes at a few cents or less.

Why doesn't Rizon list the December decision?#

Because it has no 50/50 strike. With a hike near 77% and a hold near 22%, any strike between 4.00% and 4.25% is worth about 79¢ on one side, so a book that always pays 2× would be one-sided.

What does FED-2027 settle on?#

The upper bound of the target range in effect on Dec 31, 2027, from FRED's DFEDTARU, settled automatically once that value is published.