Gate x Polymarket: How many Federal Reserve interest rate cuts will there be by 2026?

The Federal Reserve’s interest rate path has long been a “barometer” for the crypto market—rate cuts release liquidity and push risk assets higher; rate hikes or maintaining tight policy suppress valuation expansion. Entering the second quarter of 2026, market expectations for the number of rate cuts have taken a sudden “about-face.” As of April 16, what signals do the two major forecasting platforms, CME FedWatch and Polymarket, actually send?

CME FedWatch: Zero probability of rate cuts before June

According to the latest data from CME’s “Federal Reserve Watch” tool on April 16, the probability that the Federal Reserve holds rates steady in April is as high as 98.4%, while the probability of a 25-basis-point rate hike is only 1.6%. More importantly, market pricing shows that the probability of a cumulative 25-basis-point cut by June is 0%, the probability of holding rates steady is 98%, and the probability of a cumulative 25-basis-point increase actually rises to 2%.

This means that before mid-year, traders have completely ruled out the possibility of rate cuts and have even started pricing in the “opposite option”—rate hikes. On a full-year basis, CME tools show that the market currently estimates the probability of the Federal Reserve cutting rates by the end of 2026 at about 29%, down significantly from 40% a month earlier. The full-year rate cut outlook has been sharply compressed from 2 to 3 cuts down to no more than 1 cut, and the first rate-cut window has been pushed to after September.

Polymarket: The “voting” results of the prediction market

Polymarket is another important window for observing rate-cut expectations; it reflects the collective judgment of market participants through real-money bets.

According to information published by the Gate platform, as of early April, Polymarket’s prediction market shows that the probability of 0 rate cuts by the Federal Reserve in 2026 has surpassed 39%, surging 24% in the short term. The probability of 3 rate cuts is only 9%, down 28% in the short term. This set of data directly reflects that market confidence in rate cuts within the year is rapidly falling apart. Previously, in mid-March, bets on Polymarket showed that the probability of 1 rate cut (25 basis points) was 30%, the probability of no cuts was 23%, and the probability of 2 rate cuts (50 basis points) was 23%, with trading volume already exceeding $10.25 million. After the release of March CPI data and the continued escalation of the situation in the Middle East, rate-cut expectations further tilted toward “0 cuts.”

Fed dot plot: a “rapid stop” from 3 cuts to 1 cut

If prediction markets reflect traders’ short-term sentiment, then the Fed’s official dot plot represents the policy makers’ medium- to long-term baseline judgment.

At the end of 2025, the median forecast of Fed officials was still 75 basis points of rate cuts in 2026 (about 3 cuts). But after the March 2026 FOMC meeting, the dot plot compressed this figure drastically to 25 basis points (just 1 cut), and even 4 committee members believed that rate cuts should not happen at all this year. The meeting voted 11:1 to keep the target range for the federal funds rate unchanged at 3.50%—3.75%, with only Governor Mylan supporting a 25-basis-point rate cut.

The bull-bear game: 1 cut, 2 cuts, or 0 cuts?

The minutes of the March 2026 FOMC meeting show that within the Federal Reserve, opinions on the interest rate path are sharply divided, with views on zero, one, or two rate cuts nearly evenly split. This division also exists among institutional analysts:

• The “one cut” camp: Bai Xue, an analyst at Orient Securities, believes that, based on the March dot plot, Powell’s statements, and geopolitical conditions, there is a high likelihood of one rate cut in 2026, with the timing most likely to be at the September meeting. Yellen also believes there could be one rate cut later this year.
• The “two cuts” camp: Bank of America maintains forecasts of 25 basis point rate cuts in September and October, totaling 50 basis points for the year, but concedes that “our forecast foundation is not solid, and the risks lean toward no rate cuts this year.” Goldman Sachs also maintains expectations for 25 basis point rate cuts in September and December.
• The “0 cuts, or even hikes” camp: Goolsby, a former dovish official, stated that if oil prices remain high for the long term, rate cuts may be delayed until after 2027. Some traders have even started pricing in the possibility of rate hikes before the end of 2026.

Why have rate-cut expectations cooled sharply?

Two core variables drive the rapid drop in rate-cut expectations.

First, inflation rebounds. The U.S. March CPI rose 3.3% year over year, sharply accelerating from 2.4% in February; it rose 0.9% month over month, the largest single-month increase since June 2022. The energy index surged 10.9% month over month, gasoline prices jumped 21.2%, and together these contributed nearly 70% of the overall CPI increase.

Second, employment remains resilient. March non-farm payroll employment increased by 178,000, far exceeding the market expectation of 60,000, reaching the highest level since December 2024, and the unemployment rate fell back to 4.3%. A strong labor market provides the Federal Reserve with the confidence to “hold steady.”

Potential impact on crypto assets

For crypto investors, the evolution of rate-cut expectations means that the timing and pace of liquidity release are still unclear. As Gate platform analysis points out, the crypto market is also at a critical juncture—as of April 13, Bitcoin is $71,216.2, Ethereum is $2,203.29, and GT is $6.61. Against the double backdrop of macro rate uncertainty and wide volatility in crypto assets, investors can focus on the two categories in Gate’s financial product matrix—principal-protected and floating products—making flexible allocations according to their own risk preferences.

Summary

Combining CME FedWatch, Polymarket prediction markets, the Fed dot plot, and viewpoints from major institutions, as of April 16, 2026, market expectations for the number of rate cuts by the Federal Reserve this year have been sharply reduced from 2 to 3 times at the beginning of the year to 0 to 1 time. Polymarket data shows that the probability of “0 rate cuts” has surpassed 39%, while CME FedWatch shows that the probability of rate cuts before June is 0%. The key drivers behind the shift are the March inflation rebound and strong employment. Although some institutions (such as Bank of America and Goldman Sachs) still stick to forecasts of 1 to 2 rate cuts, there is a consensus that the risks are clearly skewed toward no rate cuts. The direction of the situation in the Middle East and future inflation data over the coming months will be key variables in determining the number of rate cuts. Investors should remain flexible and continue to monitor changes in macro data and market signals on the Gate platform.