Prediction markets are converging on strong odds the Federal Reserve will leave interest rates unchanged at its September meeting.
Traders on Kalshi and Myriad see the central bank holding its target rate range at 3.50%-3.75% when policymakers meet on September 15th-16th.
The US-based prediction platform Kalshi prices the no-change outcome at 67%, with a 31% chance of a 25 basis point hike and just a 2% chance for a cut.
Myriad shows 71% for no change, 30% for a 25 basis point increase and 3% each for larger moves in either direction.
These market readings track closely with a fresh Reuters poll of 104 economists.
Ninety-four respondents, or 90%, expect rates to stay on hold at the September meeting, while 80 anticipate no shifts through year-end.
The consensus follows July’s weaker-than-expected jobs report, cooler consumer inflation, and softer retail sales, which have tilted sentiment toward a wait-and-see stance.
Says Ryan Wang, US economist at HSBC,
“The debate clearly is about the possibility of rate hikes. We’ve gone through the July inflation numbers, and they were basically neutral. On the activity side the very latest data do show some softening. That could push more FOMC policymakers into the wait-and-see camp rather than in the immediate rate hike camp.”
However, Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, believes the outcome will hinge on inflation.
“The FOMC’s debate next month will come down entirely to the inflation outlook… As things currently stand, I still expect the FOMC to tighten next month.”
Economists in the poll project PCE inflation averaging 3.5% this year and staying above the 2% target at least through 2028.
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