Fed Hike Odds Jump to 36% at Wednesday FOMC Meeting as Markets Price Unusual Policy Uncertainty
Markets are pricing a 36% chance of a Federal Reserve rate hike at Wednesday’s policy meeting, with probability models tracking trader positioning showing the likelihood reaching a multi-month peak.
The elevated odds place the upcoming gathering in just 3% of the 135 Federal Open Market Committee sessions held since the end of the 2009 financial crisis. Historical sessions with comparable probability spreads typically followed financial stress or centered on the size of expected rate reductions rather than direction. A separate prediction platform also recorded a public directive from Donald Trump requesting that the central bank keep interest rates at the lowest level globally.
From the sources (8 posts)
@biancoresearch1/4 The odds of a hike at Wednesday’s meeting are 36%. At no point over the last month or two have these odds reached 50%, but again, this is fairly odd to see such uncertainty so close to a meeting.
@biancoresearch2/4 Since the financial crisis ended in June 2009, the Fed has held 135 FOMC meetings. Only four (3%) of them had enough uncertainty for the probability to be between 33% and 66% in the days leading up to the meeting.
@biancoresearch3/4 Three of them revolved around financial stress, prompting market players to wonder whether it would force the Fed to be more dovish. The fourth was September 2024, but the uncertainty was whether the Fed would cut 25 or 50, not wheth
@biancoresearch4/4 This meeting (the 136th since the financial crisis) has the probability of a hike at 36% as of this writing. But this is about the end of forward guidance. This suggests that such certainty will be the norm going forward.
@macroedgeresTrump asked on Fed this week: Prices are going down rapidly, Warsh will do the right thing #MacroEdge
@polymarketJUST IN: Trump tells Fed “we should have the world’s lowest interest rate”
@polymarket15% chance the Fed cuts rates this year.
@kalshiJUST IN: 69% chance of Fed rate "hike" this year