Fed rate cut by December 2026 meeting?

The December 2026 FOMC meeting has been priced as the last realistic window for a first cut this year — and even then, the market assigns it roughly one-in-four odds. The meeting-by-meeting curve tells the story cleanly: earlier dates carry negligible probability, with October a distant second and everything before September essentially dismissed. If a cut happens in 2026, the market is saying it happens late, not early — and more likely it doesn't happen at all. The "no cuts in 2026" scenario has become the Street consensus. Goldman Sachs has moved its baseline to zero cuts this year, pushing its next expected reductions out to 2027, citing stronger-than-expected labor and growth data. The Fed's own posture — holding at the current target range through consecutive meetings while managing oil-driven inflation amplified by the Iran conflict — has been consistently read by markets as a committee in no hurry to ease. The "higher for longer" framing that defined 2025 has simply extended into 2026 with new geopolitical justification. The roughly one-in-four probability on December reflects the realistic scenarios where the calculus changes by year-end: a meaningful softening in inflation over the summer and fall, a labor market deterioration that gives the Fed political and analytical cover to move, or a resolution of the Iran conflict that removes the oil-price overlay. None of those scenarios require a dramatic shock — just a gradual data improvement over six months. That's enough to keep December as a live window, even as the base case remains unchanged. The contract is correctly priced as a minority outcome with a credible fundamental path to Yes.