Traders on Kalshi See 98% Odds of Fed 25-Basis-Point Rate Cut
CME FedWatch data now shows a 67.3% probability of a December Fed rate cut, reflecting a slight downward adjustment from earlier figures and differing from Kalshi traders’ more confident projections.
Summary
According to CME FedWatch data, there is a 67.3% probability that the U.S. Federal Reserve will cut interest rates by 25 basis points in December, with a 32.7% chance of keeping rates unchanged. For January, CME estimates a 55.8% probability of a cumulative 25 basis point cut and a 22.3% probability of a cumulative 50 basis point cut. These updated probabilities mark a decline from prior figures and remain lower than Kalshi prediction market traders’ estimate of a 98% likelihood of a December cut.
Terms & Concepts
- Basis Point (bps): A unit equal to one hundredth of a percentage point, often used to describe changes in interest rates.
- Kalshi: A regulated prediction market platform where traders can bet on the outcome of real-world events.
- Interest Rate Cut: A reduction in the benchmark interest rate set by a central bank, typically aimed at stimulating economic activity.