Central Bank Effect — ^GSPC
Market reaction around central bank meetings (t0 = decision day)
Polymarket Fed Path 2026 — what the market is pricing in
Alongside the historical event analysis above: the implied probability distribution from the Polymarket event "How many Fed rate cuts in 2026?". 13 outcome markets (0, 1, 2, ... 12+ cuts), live via Polymarket API, weighted expected value as green line.
Methodology
Data Basis
- Fed (FOMC): 224 meeting dates (2000–2026)
- Fed rate hikes: 40 hike decisions (2000–2024) — only sessions at which the Fed raised the key rate
- Fed rate cuts: 31 cut decisions (2000–2024) — only sessions at which the Fed lowered the key rate
- ECB: 96 governing council meetings (2015–2026)
- Bank of England: 58 MPC meetings (2020–2026)
- Bank of Japan: 40 meetings (2022–2026)
- Price data: Supabase (Yahoo Finance), updated daily
Hike vs. Cut Analysis
The Fed Rate Hikes and Fed Rate Cuts options let you analyze how the market reacts to the direction of the monetary policy decision — rather than all meetings indiscriminately. Classic thesis: equities rise after rate cuts (expansionary policy), fall after hikes (restrictive). A backtest shows whether this holds.
Calculation
- t0: central bank decision day (or next trading day)
- Normalisation: price path normalised to t0 = 0%
- Window: t−N to t+N trading days around the decision day
- Average curve: mean across all events in the period
- Win Rate: share of events with positive return (t−N to t+N)