September Fed Rate Decision Probability & Yield Transmission Analyzer

FOMC Outcome Probability Distribution

Market-implied probabilities for the September 2026 rate decision

Cut (-25 bps) 1.0%

Hold (0 bps) 46.0%

Hike (+25 bps) 45.0%

Aggressive Hike (+50 bps) 8.0%

Normalization: Probabilities dynamically scale to total 100.0%. Total Sum: 100.0%

Implied Rate & Macro Transmission

Real-time yields, dollar index repricing, and duration drift

Total Hike Probability 53.0% Hold (46.0%) vs Hike (53.0% total)

Implied Rate Delta +18.25 bps Expected funds rate shift

2Y Treasury Yield Shift +14.6 bps Yield: 4.526% (Base: 4.380%)

Macro Regime Hawkish Repricing Shock Policy uncertainty index elevated

Action	Target Delta	Probability	Expected Bps

Cross-Asset Repricing Sensitivities

Estimated market reaction across rates, FX, and repo spreads

US 10-Year Treasury Yield Term premium pass-through factor (0.42x beta)

+7.7 bps

US Dollar Index (DXY) Impact Short-term interest rate differential carry elasticity

+0.64%

30-Year Fixed Mortgage Spread MBS duration extension and hedging friction

+11.9 bps

SOFR / Repo Liquidity Stress Overnight lending friction & collateral tightening

Moderate (+4.2 bps)

Model Assumptions & Kalshi Contract Context

Methodology for fed funds implied futures and yield duration

Tape Grounding: Based on breaking flow reported by @DeItaone regarding Kalshi September meeting markets (kxfeddecision-26sep). When trader volume suddenly flows into the +25 bps and +50 bps hike contracts, fixed income markets experience a front-end curve steepening or inversion wave depending on term premia.

Expected Rate Delta: $\sum (P_i \times \Delta_i)$ where $\Delta \in \{-25, 0, +25, +50\}$.
2Y Treasury Beta: Front-end Treasury yields exhibit an empirical 0.80 transmission multiplier to 1-meeting surprise fed funds shifts.
Normalization Guard: Manual probability slider adjustments auto-rebalance remaining outcomes to guarantee an exact 100% total probability envelope.