Polymarket and Kalshi Traders Boost Fed Rate Hike Odds as US Inflation Report Looms
Traders on Polymarket are betting that the Federal Reserve will hike interest rates before the year ends as the US inflation report looms
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Traders on Polymarket are betting that the Federal Reserve will hike interest rates before the year ends as the US inflation report looms
The U.S. added 162,000 jobs in August, more than triple economist estimates of 53,000, with broad-based gains across restaurants, government, education, and manufacturing. However, the strong jobs report increased the probability of a Federal Reserve rate hike in September from 50% to 62.4%, which spooked investors concerned about higher borrowing costs and recession risks. While the healthy labor market is structurally positive long-term, near-term market sentiment remains negative due to rate hike concerns.
Fed Governor Chris Waller stated that the August inflation report (releasing Sept. 11) will likely determine his vote on whether to raise interest rates at the upcoming FOMC meeting. If inflation shows continued progress toward the 2% target, he would support holding rates steady; if inflation comes in hot, he would consider a rate hike. With three FOMC members already dissenting in favor of a hike, Waller's potential support could shift the committee's decision, making the inflation data a critical tiebreaker.