Yesterday, the Fed announced a 0.25% rate hike, its first increase in three years.

Back on June 12, the VICO model opened its "rate hike in 2026" forecast at 92%. That same day, Polymarket gave the same outcome just 40%.

Over time, that gap closed as the market slowly moved toward VICO, which stayed above 75% the whole way. The day before the hike, both VICO and markets sat at 96%.

VICO also led on the specific September meeting. The VICO model opened its September forecast at 68% on June 24, when Polymarket was at 38%, and as late as August 28, Polymarket still gave a September hike just 28%.

The VICO model never dipped below 63% the entire time. On the morning of August 28, before Fed Chair Warsh's speech, it already sat at 70%.

Warsh's speech that day pushed market expectations above 50%, and prediction markets have climbed quickly every day since. VICO ticked up too, but only slightly, because it was already there. The day before the hike, VICO and markets converged around 90%.

The pattern is the edge. VICO gave months of warning on both the 2026 hike and the September decision, while the market needed a speech from the Fed Chair to see what VICO had flagged back in June.

The model also thinks the Fed may not be done, reading one increase as likely too little to bring inflation to heel.