Traders on Polymarket are overwhelmingly betting that the Federal Reserve will keep interest rates unchanged at its next policy meeting.
As of Tuesday, contracts predicting a hold in the 4.25% to 4.50% range are trading around 98 cents, implying a 98% chance that the Fed will not adjust its benchmark rate.
Bets on a rate hike or a cut are priced far lower, suggesting the market sees little chance of any deviation from the current policy.
This aligns closely with data from the CME FedWatch Tool, which also shows a 98% probability that the Fed will maintain its current rate.
Polymarket, a crypto-based prediction platform using USDC, has become a popular tool among traders seeking to gauge sentiment on major macro events, including Fed decisions, elections, and geopolitical developments.
With FOMC minutes and Fed Chair Jerome Powell’s remarks due Wednesday, traders are closely watching for any signals that might shift expectations later in the year.
The Federal Reserve’s current interest rate range of 4.25% to 4.50% plays a critical role in shaping the direction of the U.S. economy.
By keeping rates at this level, the Fed is aiming to balance inflation control with sustained economic growth.
High interest rates make borrowing more expensive for consumers and businesses, which tends to cool down spending, investing, and hiring.
This helps reduce demand-driven inflation but can also slow economic activity and increase the risk of recession.
For consumers, credit card rates, mortgages, and auto loans remain elevated, putting pressure on household budgets.
Businesses also face higher costs of capital, which may limit expansion and hiring.
At the same time, higher rates benefit savers, as returns on savings accounts and fixed-income investments improve.
The Fed’s decision to hold rates steady, rather than cut, signals that it remains cautious about inflation’s persistence — even if price increases have slowed in recent months.
Markets, meanwhile, are watching closely for any policy shift.
A rate cut could stimulate growth and boost asset prices, while another hold or a hike would reinforce the Fed’s commitment to price stability, potentially tightening financial conditions further.