(NewsNation) — If prediction markets are any guide, almost no one expects the Federal Reserve to slash interest rates when policymakers meet Wednesday.
As of Tuesday afternoon, traders on Kalshi put the chance of the Fed holding steady at 97% — with real money riding on the outcome.
The U.S.-based prediction market platform has seen more than $43 million in trading volume on contracts speculating on the Fed’s July decision.
What is Kalshi and how do prediction markets work?
Kalshi, and other platforms like it, have become a popular way to gauge expectations, since traders have real money on the line. At times, like during the 2024 election, they’ve even signaled shifts ahead of traditional polls.
In this case, experts widely expect the Fed to hold its short-term interest rate steady, as Kalshi’s trading suggests. If the central bank does so, it would mark the fifth consecutive meeting with no change.
That decision is unlikely to please President Donald Trump, who has repeatedly called on Fed chair Jerome Powell to lower interest rates.
“Families are being hurt because Interest Rates are too high,” Trump wrote on Truth Social last week. “This stubborn guy at the Fed just doesn’t get it — never did, and never will.”
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But Fed officials — and most economists — see it differently and believe rates should be relatively high to prevent overheating and a burst of inflation.
Inflation accelerated in June, rising at its swiftest annual pace since February as Trump’s tariffs pushed up the cost of a range of goods, including furniture, clothing, and large appliances.
Part of the reason policymakers have been reluctant to lower rates is tariff uncertainty, the effects of which have yet to be fully realized as negotiations are ongoing.
Fed officials last month penciled in just two reductions this year and one in 2026. They forecast that their key rate will still be 3.6% at the end of next year, but Trump is pushing them to cut it to 1%.
Kalshi traders put the chance of two 2025 rate cuts at 39% and one cut at 25%, as of Tuesday afternoon.
The Associated Press contributed to this report.
