1 Wise Money predicts that the Federal Reserve interest rate will change in the next 3 months

According to PolyBeats monitoring, on the prediction market Polymarket, a savvy trader has placed a $242 bet on "Will the Federal Reserve interest rate change in the next 3 months?", with an average buy-in probability of 38.5%. Currently, the probability of "Yes" stands at 63.0%.

puravida has wagered $242, with the best-performing category in this market being Macroeconomics, generating a net profit of $28,400. Out of 436 settled trades in this category, their win rate is 294/436 (67%), with 155 trades where the buy price was below $0.8 and the sell price was above $0.95. Within a similar cost range ($0.301-$0.45), the median historical investment amount is $109.

The market rule focuses on the upper limit of the federal funds rate target range. If after the June, July, and September FOMC meetings, the upper limit remains the same as before each meeting, the settlement will be "Yes-Yes-Yes"; however, if there is a rate cut or hike in July or September, the market will turn to "No".

On June 17, the Federal Reserve voted 12-0 to maintain the interest rate at 3.50%-3.75%, stating that economic activity continues to expand at a solid pace, with job gains keeping up with labor force growth, but inflation is still above the 2% target. The committee emphasized its commitment to achieving price stability.

The BEA's May PCE data released on June 25 showed that headline PCE rose to 4.1% year-on-year, while core PCE increased by 3.4% year-on-year. Both personal income and spending also grew by 0.7% month-on-month. This high inflation makes an immediate rate cut unlikely. Based on an analysis by Schvab, 9 FOMC officials expect at least one rate hike in 2026, 8 anticipate no change, and only 1 predicts a rate cut.

However, the "No" camp has recently adopted a new rate-cut narrative: since the appointment of the new Fed Chair Kevin Wash, there has been a focus on "trimmed mean inflation" and "median inflation" to monitor underlying inflation, rather than solely relying on overall PCE or traditional core PCE. Under this framework, inflation appears less severe: Dallas Fed data on June 25 showed the 12-month trimmed mean PCE inflation rate for May was 2.4%, significantly lower than the overall PCE's 4.1% and core PCE's 3.4%; the 1-month annualized rate was 2.8%, and the 6-month was 2.5%.

Therefore, when the market talks about "shifting algorithms to support rate cuts," it is more accurate to say that if the Fed under Wash's leadership places more emphasis on these underlying inflation indicators, the distance from the 2% target may not seem as distant, increasing the possibility of discussing rate cuts before September.

Note: Based on their trading history, this trader is not necessarily betting on the actual outcome of events but may engage in profit-taking or stop-loss behaviors after opening a position during a specific timeframe.

Account:
0x80a4552cdcde3b861b8adc146ab1fbd4711022cc.
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