Home › Guides › Polymarket vs CME FedWatch: how the Fed odds differ
Updated September 25, 2026 · facts checked against the dated sources listed below
CME FedWatch does not trade Fed outcomes: it derives the probability of each rate move from 30-Day Fed Funds futures, which settle on the average effective federal funds rate over a month. Polymarket's Fed markets trade each outcome of an FOMC meeting directly and settle on the change in the upper bound of the target range in the Fed's statement. The two often point the same way but can differ by several points, as they did before the Fed's September 2026 hike.
CME Group's 30-Day Fed Funds futures are cash-settled at 100 minus the average daily effective federal funds rate (EFFR) over the contract month, so a price of 96.25 implies an average rate of 3.75%. FedWatch uses those prices to back out the rate expected after each FOMC meeting, splitting the meeting month into the days before and after the decision and anchoring on the nearest month without a meeting. It assumes the Fed moves in steps of 25 basis points and builds a probability tree across meetings; the chance of a hike is the sum of the probabilities of every rate level above the current one.
The EFFR itself is a volume-weighted median of overnight federal funds trades, published by the New York Fed each morning for the previous business day. It trades inside the Fed's target range, but its position moves: it was 8 basis points above the bottom of the range in mid-September 2024 and 13 above it after the September 16, 2026 hike, printing 3.88% in a 3.75%–4.00% range. Polymarket, by contrast, settles on the upper bound.
See also: Fed funds futures to probability calculator · FOMC · Basis point
Polymarket lists one event per FOMC meeting. The one for October 27–28, 2026 has five outcomes: a cut of 50 basis points or more, a 25-point cut, no change, a 25-point hike and a hike of 50 or more. Its rules measure the change in the upper bound of the target range against its level before the meeting, round any unlisted change up to the nearest 25 basis points and name the FOMC statement as the resolution source. If no statement is released by the end date of the next scheduled meeting, the market resolves to “No change”.
Moves between meetings have been handled in separate markets: in August 2024 Polymarket listed a market on an emergency cut after any unscheduled Fed meeting, which resolved No. The October 2026 market carries an economics taker fee, at a rate of 0.05 as of September 25, 2026, and like other Polymarket markets it settles through the UMA oracle, which takes about two hours after a proposal when nobody disputes it.
See also: How Polymarket Fed decision markets work · Fed rate odds for every upcoming FOMC meeting
Different instruments. Futures price an average rate over a calendar month, so a meeting late in the month moves only a few days of the average. A Federal Reserve Board staff paper published in February 2026 notes that fed funds futures give only monthly averages and need an assumption of just two possible outcomes to produce probabilities, while prediction markets price each outcome directly.
Different settlement rates. FedWatch works from the EFFR, which trades inside the range at a spread that can drift, while Polymarket settles on the announced upper bound. The same Board paper points out that a gap of a few basis points can change implied probabilities a lot.
Different traders and costs. The Board paper notes that institutions' hedging needs can bias prices in rate markets, that prediction markets capture retail traders' beliefs without those hedging motives, and that all such prices are risk-neutral and can carry risk premiums. Polymarket takers also pay a fee, which is largest in dollars near 50 cents.
Timing. The two update at different moments, and quotes taken minutes apart can differ around a data release: on September 11, 2026, Polymarket's price for a September hike rose from 59.5 to 79.5 cents within two minutes of the consumer price index release.
September 2024: minutes of the September 17–18, 2024 meeting say futures had come to imply a higher probability of a 50 basis point cut than of a 25-point cut. Polymarket traders were less sure: in the two hours before the statement on September 18, its “50+ bps decrease” outcome traded between 36 and 50 cents. The Fed cut by 50 basis points, and the Board staff paper found that Kalshi, another prediction market, had put greater weight on the 50-point cut.
August–September 2026: CoinDesk reported CME FedWatch at 58% for a September hike on August 31 and again on September 7, when Polymarket's “25 bps increase” for the same meeting traded at 51.5 and 48.5 cents. For the October meeting, FedWatch showed just over 50% for another hike on September 17, while Polymarket traded between 44.5 and 47.5 cents that day.
The gap closed as the September meeting neared: CoinDesk wrote on September 16 that markets had almost fully priced a 25-point hike, Polymarket stood at 91 cents when the statement came out, and the Fed raised the range by 25 basis points to 3.75%–4.00%.
Neither number is a forecast by CME or Polymarket; both are market prices. Use FedWatch for the futures market's view and Polymarket for a direct price on each outcome, and when they differ, check the time of each quote, where the EFFR sits in the range and how much the Polymarket outcome has traded. Our Fed rate odds page shows Polymarket and Kalshi side by side for each meeting. This is educational information, not financial advice.
See also: Polymarket vs Kalshi odds today · Fed and interest rate odds
There is no settled answer for Polymarket. A Federal Reserve Board staff paper found that the most likely outcome on Kalshi had zero average error by the day of FOMC meetings, an improvement over fed funds futures, but it did not study Polymarket.
FedWatch converts monthly-average futures prices into odds under a 25-basis-point assumption, while Polymarket traders price each outcome directly and settle on the upper bound of the target range. Timing, fees and who is trading also matter.
The change in the upper bound of the federal funds target range announced in the FOMC statement for that meeting, with unlisted changes rounded up to the nearest 25 basis points.
Subtract the price from 100 to get the expected average rate for the month, work out the rate after the meeting from the days before and after it, and divide the implied change by 25 basis points. Our calculator does this.
Polymarket View is independent and not affiliated with Polymarket. Educational information, not financial advice. All guides · How market types work · Glossary · Polymarket odds today