The Fed rate sets the anchor for global asset pricing. If the rate hits extreme values (like the options ↓0% or ↑5.5%), it would cause structural shocks across nearly all asset classes. This market is essentially a bet on the macro monetary policy path, highly correlated with US Treasury yields, the Dollar Index, and risk assets (equities, crypto), making it a core tool for macro hedging.

Apr 11, 2026 - Apr 13, 2026, the price of ' ↓ 1.25%' continued to surge from 6.35c to 28.95c. Reason: Risk-off sentiment fermented further, with capital continuously pouring into extreme recession options for tail-risk hedging. Apr 11, 2026 - Apr 12, 2026, the price of ' ↓ 1.25%' surged from 6.35c to 24.05c. Reason: The market likely experienced a strong risk-off reaction to unexpectedly weak economic data or sudden geopolitical events, drastically increasing the tail-risk pricing for a deep recession. Apr 8, 2026 - Apr 10, 2026, the price of ' ↓ 1.25%' crashed from 22.25c to 8.2c. Reason: The market returned to normalcy after a brief risk-off sentiment, leading to a sharp contraction in the pricing of deep recession risks. Apr 8, 2026 - Apr 9, 2026, the price of ' ↑ 5.5%' surged from 4.0c to 16.8c. Reason: The market likely repriced extreme tail risks aggressively due to unexpected hawkish signals or extreme inflation data. Apr 5, 2026 - Apr 6, 2026, the price of ' ↓ 1.25%' crashed from 24.35c to 16.7c. Reason: The market likely digested new strong economic data, reducing expectations for significant rate cuts in the near term. Apr 4, 2026 - Apr 5, 2026, the price of ' ↓ 3.25%' surged from 54c to 65.5c. Reason: After digesting earlier strong data, the market likely reacted to new dovish commentary or slight forward guidance adjustments, causing a rebound in rate-cut expectations. Apr 2, 2026 - Apr 4, 2026, the price of ' ↓ 3.25%' crashed from 70.5c to 54c. Reason: The market likely digested new strong economic data, reducing expectations for significant rate cuts in the near term. Mar 31, 2026 - Apr 2, 2026, the price of ' ↓ 3.25%' surged from 62.5c to 70.5c. Reason: The release of softer economic data or dovish comments from Fed officials caused a resurgence in rate-cut expectations. Mar 28, 2026 - Mar 31, 2026, the price of ' ↓ 1.25%' fell from 38.3c to 25.8c. Reason: The market repriced the risk of a deep recession after extreme sentiment faded, and the return of normal liquidity squeezed the premium out of this option. Mar 27, 2026 - Mar 30, 2026, the price of ' ↓ 1.25%' surged from 6.0c to 38.3c before settling at 25.3c. Reason: The market likely experienced large hedging trades against extreme tail risks (e.g., severe recession), or violent slippage triggered by small orders amid severe weekend illiquidity. Mar 27, 2026 - Mar 28, 2026, the price of ' ↑ 5.25%' surged from 3.05c to 27.4c. Reason: Also driven by pricing anomalies due to extreme sentiment or lack of liquidity. Mar 25, 2026 - Mar 26, 2026, the price of ' ↓ 3.25%' surged from 54.5c to 70.5c. Reason: The market likely reassessed weaker economic data after a short-term sell-off, leading to a resurgence in rate-cut bets. Mar 24, 2026 - Mar 25, 2026, the price of ' ↓ 3.25%' crashed from 71.5c to 54.5c. Reason: Post-FOMC 'buy the dip' sentiment faded as the market reassessed sticky inflation data, sharply revising down the probability of rate cuts. Mar 21, 2026 - Mar 24, 2026, the price of ' ↓ 3.25%' rebounded from 60.5c to 71.5c. Reason: Likely retail 'buy the dip' behavior post-FOMC or over-interpretation of the median '1 cut' in the Dot Plot. Mar 20, 2026 - Mar 23, 2026, the price of ' ↓ 3.0%' crashed from 39.5c to 26c. Reason: The market continued to digest the 'Hawkish Hold' signal post-FOMC, leading to a sell-off in deep-cut options.

Prediction markets imply a nearly 29% probability that the Fed rate will hit an extreme low of 1.25% before 2027, which significantly diverges from the baseline scenario of moderate cuts to around 3% forecast by mainstream economists and institutions. Mainstream views typically do not set deep recessions or black-swan rate cuts as their baseline, whereas prediction markets often significantly overprice extreme tail risks due to hedging demands, liquidity premiums, and speculative trading.