Prediction Markets Slightly Raise Odds of Fed Rate Hike in July
Polymarket and Kalshi showed a modest increase in the probability of a 25 bps rate hike at the July 28-29 FOMC meeting, though a pause remains the consensus.
Traders on prediction markets adjusted their expectations for the Federal Reserve's July 28–29 meeting. On Polymarket, the odds of rates staying unchanged fell to 73.8% over the past day, while the chance of a 25-basis-point hike rose to 26.4%, with trading volume of $109 million. Kalshi showed a similar shift: 72.9% for a pause and 27.6% for an increase.
The reassessment was largely attributed to oil markets. Amid renewed tensions in the Persian Gulf, Brent crude briefly surged above $100 per barrel last week before pulling back to $87.84. Major brokers, including Deutsche Bank, still anticipate a pause but acknowledge a heightened risk of tightening.
Supporting the case for no change is June inflation data, which slowed to 3.5% from 4.2% in May. The current Fed funds rate range stands at 3.50–3.75%.
Source: ForkLog