Fed rate decision prediction markets: how to trade and hedge the FOMC

Contents

What is a Fed rate decision market?#

A Fed rate decision market is a set of contracts on one FOMC meeting, one per result, each paying 1 if that result happens and 0 if not. Each price, between 0 and 1, reads as the chance of that result, and since exactly one wins, the prices add up to about 1.

The FOMC sets the federal funds target range at eight scheduled meetings a year, and the Fed says changes in that rate influence other interest rates.

How does the December Fed market settle?#

This guide calls the three results cut, hold and hike. On the HIP-4 market they map to the market's own outcome names: Cut is Decrease, Hold is No change, and Hike is Increase. Any size of move counts: a 50 basis point hike resolves Increase like a 25 point one.

The rules compare the upper bound of the target range announced by the FOMC with the one in effect just before: 4.00%, which the Fed kept on 28 October 2026, with two members voting to hike. If no decision is established by 27 January 2027 at 19:00 UTC, for example because the meeting is cancelled, No change resolves Yes. The first published decision counts.

The December market on Totalis, as of 11 November 2026, 15:45 UTC (Totalis public markets API):

It is question 545 on Hyperliquid. HIP-4 outcomes are fully collateralized, with no leverage or liquidations; what HIP-4 is covers the mechanics, and how to trade prediction markets on Hyperliquid walks through a first trade.

Where can you trade the Fed rate decision?#

You can trade the December decision on Totalis (outside the US), Kalshi (CFTC-regulated, US and many other countries) and Polymarket (international, crypto-based). As of 11 November 2026, all three price a hike at 96% to 98%, a hold at 3% to 5% and a cut at under 3%.

Totalis. A single goes straight to the HyperCore order book. Hyperliquid charges outcome fees when you close or settle, and singles usually add a 0.1% builder fee on filled value, per the Totalis fees and limits page. Limits: it is not available to US persons or anyone in the US, and you can't trade the size of a move.

Kalshi. Five outcomes by size of move, with "Fed maintains rate" as the hold. Its FEDDECISION contract terms use the Federal Reserve as the source, and a cancelled meeting resolves to no change. It is a CFTC designated contract market, open to traders in many countries outside the US, with a fee on expected earnings. As of 11 November 2026, its Fed odds page put "Hold" at 5%, "Hike 25bp" at 86% and a larger hike at 12%.

Polymarket. The Fed Decision in December market resolves on the change in the upper bound, rounding odd sizes up to the nearest 25 basis points. The UMA Optimistic Oracle settles it. Economics markets charge takers the fee in Polymarket's table and makers nothing. The international site is close-only for the United States. As of 11 November 2026, No change was 2.85%, a 25 bps increase 85.5% and a larger increase 11.75%.

CME FedWatch reads probabilities from futures prices; it is a reference, not a market. Wider comparisons: Hyperliquid vs Polymarket vs Kalshi, Polymarket alternatives and Kalshi alternatives.

How do you hedge a Fed rate decision?#

Buy Yes on the result that would cost you money. Each share pays 1 if that result happens, so one share covers one unit of loss:

Hedge cost = loss you want to cover × Yes price.

A hike might cost you through a variable-rate loan, since many banks set the prime rate partly on the federal funds target, or through a rate-sensitive holding.

How much should you hedge?#

Say a hike on 9 December would cost you about 100 USDC and Increase Yes costs 0.75. These are hypothetical round numbers, before fees, not advice:

Either way you end near −75: an unknown cost became a known one. At 75 cents, locking it in costs three quarters of the hit; at the 11 November price of about 96 cents it costs nearly all of it, which is why a hedge is cheapest before the market has moved. Hedging half, 50 shares for 37.50, leaves half the risk open. Covering an unlikely result is cheap: if a surprise hold would cost you 100, 100 No change shares at about 0.03 cost 3 (11 November price). The same sizing works for a price level: hedging a Hyperliquid perp with HIP-4 applies it to a BTC position.

Why can a hedge still lose money?#

• Your loss doesn't track the decision exactly. Fixed-rate bonds fall when market rates rise, and they move with market rates, not only on the Fed's decision. Crypto is noisier: an IMF working paper found a 1 point rise in the shadow fed funds rate cut its crypto factor by 0.15 standard deviations over two weeks.
• One date, one payout. The market settles once; a loan costs you for months.
• Spread and fees come off the result, and Increase pays the same for 25 or 50 basis points.

Can you put the Fed decision in a Combo?#

Yes, from 2 December 2026 at 19:00 UTC. A Combo joins 2 to 5 outcomes into one position that pays in full only if every leg wins. Market makers quote it, and it sits in the Totalis vault on HyperEVM until Hyperliquid's results settle it.

Two rules from the Combo trading guide apply. A market opens for Combos when its event is within 7 days, so this one waits until 2 December. And a Combo holds at most one leg per question: Hold and Hike can't share one, so you would pair Hike with an outcome from another question open that week. The maker's quote is the price; don't multiply leg prices, because legs can be related.

A Combo is a concentrated view, not a hedge. Combo fees are 1.5% of stake on entry and 1% of profit (fees page above); how multi-leg payouts are priced explains the quote.

How do you trade the Fed decision on Totalis?#

1. Find the market. Browse to the Federal Open Market Committee December 2026 rate decision in the Totalis app and check the price and spread on each outcome.
2. Sign up with an invite code. Totalis is not available to US persons or anyone in the US.
3. Trade a single. Buy Yes on Decrease, No change or Increase; the order goes straight to the HyperCore order book.
4. Or add it to a Combo from 2 December. Take one outcome from this question and pair it with outcomes from other questions that are open for Combos, then accept a maker's quote.

Trade the Fed decision on Totalis

When is the next Fed rate decision?#

The next decision ends the FOMC's 8 to 9 December 2026 meeting, which comes with a Summary of Economic Projections. The HIP-4 market schedules it for 19:00 UTC on 9 December.

The Fed's 2027 meeting calendar, last updated 28 October 2026 (SEP marks a Summary of Economic Projections):

Each date is tentative until confirmed at the meeting before it, and one is set for 25 to 26 January 2028. Kalshi already lists markets for every 2027 meeting; as of 11 November 2026, December 2026 is the one Fed market on Totalis.

About the author#

Turk is a founding engineer at Totalis, the prediction market app on Hyperliquid.

Sources and further reading#

• Federal Reserve, FOMC statement of 28 October 2026, accessed 2026-11-09
• Federal Reserve, FOMC meeting calendars, accessed 2026-11-09
• Hyperliquid, HIP-4 outcome markets, accessed 2026-11-09
• Totalis, Combo trading guide, accessed 2026-11-09
• Kalshi, FEDDECISION contract terms, accessed 2026-11-09
• Polymarket, Fed Decision in December, accessed 2026-11-09

Related: what HIP-4 is, prediction market Combos, Hyperliquid fees.

FAQ#

Can you trade Fed rate cuts or hikes?#

Yes. Kalshi, Polymarket and Hyperliquid's HIP-4 markets all list cut, hold and hike outcomes for 9 December 2026. Totalis and the international Polymarket site exclude the US; Kalshi is CFTC-regulated.

How do prediction market odds compare with CME FedWatch?#

FedWatch backs its probabilities out of 30-Day Fed Funds futures prices; a prediction market prices each result directly, so a share's price is the chance. As of 11 November 2026, all three markets put a December hike at 96% to 98%, up from 75% to 78% on 9 November.

What happens if the Fed moves by 50 basis points?#

On HIP-4, any hike resolves Increase and any cut Decrease, whatever the size. Kalshi and Polymarket have separate outcomes for moves above 25 basis points.

Can I hedge a mortgage with a Fed decision market?#

Only roughly. The market pays on the Fed's decision, not on your mortgage rate, which the federal funds rate influences but doesn't set.