Prediction market traders sharply raised the odds of a Federal Reserve rate hike one day before the central bank's two-day July meeting begins. On Polymarket, the probability of "no change" fell 8.9 percentage points to 73.25% in the last 24 hours, while the odds of a 25-basis-point increase jumped 9.7 points to 26.65%. The shift reflects heightened market uncertainty about the Fed's next move, with Fed-funds futures putting the probability of an increase at 38.8% as of Monday afternoon. The Federal Reserve held rates steady in June after June inflation cooled to 3.5% from 4.2% in May, setting the stage for the upcoming July 28-29 FOMC meeting.
Polymarket and Myriad Show Sharp Probability Shifts
On Polymarket, the "no change" outcome fell 8.9 percentage points to 73.25% in the last 24 hours. A 25-basis-point increase jumped 9.7 points to 26.65%, with $100.83 million traded overall and $5.78 million in the past 24 hours.
Myriad, a prediction market operated by Decrypt's parent company Dastan, showed almost the same split, displaying 74% for "no change" and 27% for an increase. On Myriad, the odds of "no change" dropped by 9% in the past day while the odds of a rate hike jumped by 8%.
Fed-Funds Futures Signal Higher Rate Hike Probability
Professional rate traders demonstrated similar concerns about the Fed's next move. Fed-funds futures—contracts used to price the Fed's next move—put the chance of an increase at 37.6% Monday afternoon.
Current Fed Rate Range and Recent Inflation Data
A basis point is a 0.01 percentage point. A 25-basis-point hike would lift the Fed's current target range from 3.50%-3.75% to 3.75%-4.00%. When the Fed raises interest rates, borrowing becomes more expensive, which tends to slow spending and investment and can pressure risk assets. When it lowers rates, borrowing becomes cheaper, which can encourage spending and investment.
The Fed held rates steady in June and warned that inflation remained elevated, while officials' median projection placed the year-end rate at 3.8%. June inflation cooled to 3.5% from 4.2% in May, giving policymakers a reason to wait.
FOMC Meeting Schedule and Decision Release Time
The FOMC meets July 28-29 and releases its interest-rate decision at 2 p.m. Eastern time on July 29.
FAQ
What are the current odds of a Fed rate hike on prediction markets?
On Polymarket, the odds of a 25-basis-point rate hike stand at 26.65% as of the last 24 hours, while the "no change" probability is at 73.25%. Myriad shows similar figures with 27% for a rate hike and 74% for no change. Fed-funds futures put the probability of an increase at 38.8% as of Monday afternoon.
When does the Federal Reserve announce its interest rate decision?
The FOMC meets July 28-29 and releases its interest-rate decision at 2 p.m. Eastern time on July 29.
What is the Fed's current interest rate range?
The Fed's current target range is 3.50%-3.75%. A 25-basis-point hike would lift this range to 3.75%-4.00%.
