Deep Research with Paul AI
Orders
Fed decision in January?
Jan 28, 2026
Paul’s Insight
Market pricing for the Federal Reserve's January 2026 decision suggests a split expectation between a small rate cut and no change, with extremely low probability of an increase or a large cut. The likelihood of a 50+ bps cut is minimal (10.5%), while a more moderate 25 bps cut sits near 43.5%. No change is priced slightly higher than a 25 bps cut, at 46.5%. This distribution indicates market participants are hedging between the Fed responding to potential economic softness (by cutting rates), and the possibility of maintaining current monetary policy if macroeconomic indicators remain steady. The vanishingly small chance of a hike (1.6%) reflects prevailing anticipation of limited inflationary pressure or economic overheating. However, genuine forward visibility is low, as forecasts can shift significantly alongside changes in inflation, growth data, or financial market dislocation approaching the event. Major risks include unexpected macroeconomic shocks or persistent inflation. The current predictions, while data-driven, are only moderately reliable this far ahead; the balance of probabilities could sway substantially as new information emerges in late 2025.
No change
77%
AIYes77
No22
25 bps decrease
20%Yes20
AINo79
50+ bps decrease
1%Yes1
AINo98
25+ bps increase
1%Yes1
AINo98
Rules
The FED interest rates are defined in this market by the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings.
This market will resolve to the amount of basis points the upper bound of the target federal funds rate is changed by versus the level it was prior to the Federal Reserve's January 2026 meeting.
If the target federal funds rate is changed to a level not expressed in the displayed options, the change will be rounded up to the nearest 25 and will resolve to the relevant bracket. (e.g. if there's a cut/increase of 12.5 bps it will be considered to be 25 bps)
The resolution source for this market is the FOMC’s statement after its meeting scheduled for January 27 - 28, 2026 according to the official calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
The level and change of the target federal funds rate is also published at the official website of the Federal Reserve at https://www.federalreserve.gov/monetarypolicy/openmarket.htm.
This market may resolve as soon as the FOMC’s statement for their January meeting with relevant data is issued. If no statement is released by the end date of the next scheduled meeting, this market will resolve to the "No change" bracket.
