Will the Fed Cut Rates or Just Cut the Drama? Find Out Now! 😏

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Ah, the Federal Open Market Committee (FOMC) shall convene this Wednesday, and lo! All indications suggest that the benchmark interest rate shall remain as steadfast as a cat on a sunny windowsill. Yet, as we gaze into the crystal ball of future months—beginning in July—the prospects of a rate cut appear to be gathering like storm clouds on the horizon.

Prediction Markets Whisper Sweet Nothings About Powell—For Now

As the global markets prepare for a melodrama worthy of the finest theatre, the Bank of Japan, Riksbank, and our beloved U.S. Federal Reserve are poised to unveil their latest decisions on interest rates. The Fed’s grand meeting is scheduled for June 18, and according to CME’s Fedwatch tool, the odds of a quarter-point cut are as rare as a unicorn sighting—merely 0.1%. A staggering 99.9% of CME’s futures are wagering that the central bank will keep the federal funds rate as it is, much like a stubborn mule refusing to budge.

Both Polymarket and Kalshi traders are placing their bets on a rate cut this month with all the enthusiasm of a cat at a dog show. As we peer into the future of the July 2025 FOMC meeting, CME’s Fedwatch tool predicts a quarter-point trim at a mere 14.5%, with prediction markets echoing this sentiment at 14%. However, come September, the winds of change may blow, with the probability of a 25 basis point (bps) cut soaring to 57.6%, while the odds of a half-point move are a modest 8.8%—a veritable rollercoaster of financial speculation!

Turning our gaze to the CME Fedwatch projections for October, the likelihood of a quarter-point cut stands at 45.3% as of June 16. A 50bps cut is currently priced at 33.8%, while the odds of a three-quarter-point slash are a mere 4.5%. Over on Polymarket, data related to the Sept. 17 Fed meeting suggests that most traders expect no change, with a 55% probability—up two points, as if they’ve just discovered a new flavor of ice cream.

The chance of a 25bps trim is 40%, down three points, and only 4% foresee a 50bps cut on the table. A paltry 1% believe the Fed will actually raise rates by 25bps or more. The market has attracted a dazzling $1.48 million in total trading volume. While opinions may vary on Polymarket, traders on this prediction site are placing the odds of Fed Chair Jerome Powell receiving his pink slip this year at a mere 10%. Ah, the sweet scent of uncertainty wafts through the air! 🍃

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2025-06-16 21:27