Prediction markets and CME pricing now lean toward no change at the Fed's September meeting after weaker U.S. labor data and a sharp reversal from late-July hike expectations.
Markets are now leaning toward the Federal Reserve holding rates steady at its September meeting, with prediction markets and CME pricing all showing no change as the leading outcome. Polymarket assigns a 63% probability to rates staying unchanged, with more than $20.3 million in volume, while Kalshi shows 65% odds with nearly $4.9 million traded. CME FedWatch puts the probability of the Fed keeping its target range at 3.50% to 3.75% on Sept. 16 at 55.6%, versus 44.4% for a 25-basis-point hike. That marks a sharp shift from July 31, when CME FedWatch showed a 67% probability of a hike. The change in market expectations follows July nonfarm payrolls data released by the U.S. Bureau of Labor Statistics on Aug. 7 showing a decline of 23,000 jobs and an unemployment rate of 4.1%. The Fed left rates unchanged at its July 28-29 meeting, and its next meeting is scheduled for Sept. 15-16.