1 week ago
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The Federal Reserve’s September meeting just went from “maybe” to “almost certainly.” Polymarket bettors are now pricing in an 83% probability that the Fed will raise interest rates by 25 basis points when the FOMC wraps its two-day meeting on September 16, a dramatic jump from the 50-60% range just a week ago.
The catalyst was August’s core CPI data, which came in at 0.3% month-over-month, overshooting the 0.2% consensus forecast.
The numbers behind the shift
As of September 12, Polymarket’s odds for a 25 basis-point hike sat around 78-80%, with the number continuing to climb toward the 83% figure in subsequent trading sessions. Kalshi, the regulated prediction market competitor, showed closely aligned estimates. CME FedWatch futures, the traditional benchmark for rate expectations, actually ran slightly hotter at around 85-86%.
When you average across venues, the cross-platform aggregate landed at roughly 81.3% after the CPI print dropped.
Combined trading volume on Polymarket and Kalshi for the September rate decision has exceeded $190 million. That makes it one of the highest-volume books Polymarket has ever hosted.
The current federal funds target range sits at 3.50%-3.75%. If the Fed follows through with what these markets expect, rates would move to 3.75%-4.00%.
Why one CPI print changed everything
The September FOMC meeting carries extra weight because it includes the Summary of Economic Projections, the quarterly release where Fed officials reveal their individual forecasts for rates, GDP, unemployment, and inflation. Chair Powell will also hold a press conference.
What prediction markets are telling us that traditional tools aren’t
There’s an interesting divergence worth watching. CME FedWatch futures at 85-86% are running a few points above Polymarket’s estimates of 78-80%. When the two converge tightly, as they’re doing now, it tends to suggest genuine consensus rather than positioning noise.
Implications for crypto and risk assets
A rate hike to 3.75%-4.00% would tighten liquidity conditions. Higher rates increase the opportunity cost of holding non-yielding assets like Bitcoin, and they tend to strengthen the dollar. With prediction markets above 80% and futures even higher, a 25 basis-point move would surprise almost nobody. In that scenario, the market reaction would depend less on the hike itself and more on the dot plot projections and Powell’s press conference tone.
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