Prediction Markets Signal Fed Rate Hike Surprise as Traders Prepare for Market Shock
TL;DR:
- On Polymarket, the option for a 25-basis-point increase rose 9.7 percentage points to 26.65%.
- The Myriad platform reflected an equivalent adjustment, recording a 27% probability of an upward interest rate adjustment.
- Federal funds futures contracts priced the odds of a rate increase at 37.6% on Monday afternoon.
On Monday, the odds of a surprise Fed rate hike rose across major prediction markets, just one day before the agency holds its monetary policy meeting set for July 28-29.
On Polymarket, the possibility of the Federal Reserve keeping rates unchanged fell 8.9 percentage points in the last 24 hours, standing at 73.25%. In parallel, the contract considering a 25-basis-point hike increased to 26.65%, accumulating a traded volume of $100.83 million dollars.
Data from the Myriad platform exhibited a practically identical distribution of probabilities. The scenario of keeping rates steady fell 9% daily to stand at 74%, while the stance in favor of an increase gained eight percentage points, reaching 27%.
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