Expectations Regarding the Fed’s Interest Rate Decision This Month Have Almost Been Finalised

According to Polymarket, a cryptocurrency-based prediction market, the probability of the Fed keeping policy interest rates unchanged at its January meeting has risen above 96%.

Contracts traded on the platform indicate that the vast majority of participants are leaning towards a “interest rates remain stable” scenario.

At Polymarket, the total transaction volume for a “no change” outcome reached approximately $19.5 million, with the probability of this scenario being priced at 97%.

In contrast, a 25 basis point interest rate cut was priced in with only a 2% probability, while trading volume for this scenario remained around $17.2 million. Scenarios involving cuts of 50 basis points or more, as well as interest rate increases, were each assessed with a probability of less than 1%.

Despite all of Donald Trump’s pressure for interest rate cuts, it is noteworthy that the Federal Reserve is almost certain not to cut rates. Current Fed Chairman Jerome Powell’s term expires in May, and Trump is expected to appoint someone more inclined towards rate cuts as his replacement.

The Fed’s interest rate decision will be announced on January 29th.