According to the cryptocurrency-based prediction market Polymarket, the probability that the Federal Reserve will leave interest rates unchanged at its January meeting is over 96%.
Contracts traded on the platform indicate that the majority of participants are leaning toward a “rates remain stable” scenario.
Polymarket estimates the total trading volume for the “no change” outcome to be approximately $19.5 million, with a probability of 97% for this scenario.
In contrast, a 25 basis point rate cut was priced in with only a 2% probability, but trading volume in this scenario was only about $17.2 million. Scenarios involving rate cuts or hikes of 50 basis points or more were each evaluated to have a probability of less than 1%.
It’s worth noting that despite all the pressure from President Donald Trump to cut interest rates, the Federal Reserve is almost certain not to cut rates. Current Federal Reserve Chairman Jerome Powell’s term expires in May, and President Trump is expected to appoint someone with a strong interest rate cut preference as his successor.
The Fed’s interest rate decisions will be announced on January 29th.
*This is not investment advice.