Polymarket Sees 25 Basis Point Rate Cut Emerge as Frontrunner

The market has turned its attention to the Fed’s October 29 meeting. Polymarket investors believe a rate cut is almost certain. The 25 basis point cut scenario is clearly in the lead with a trading volume exceeding $5.4 million. The “no interest rate change” option remained at a volume of $4.5 million. There is only a 4% chance of a 50 basis point or greater cut, while the probability of a fixed rate is 7%. The 25 basis point cut is leading, and markets are pricing it in.

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US Political Uncertainty Boosts Rate Cut Expectations

Evercore ISI strategist Krishna Guha said the potential US government shutdown is complicating the Fed’s decision-making. Delays in data flow and a slowdown in public spending are increasing the likelihood of a rate cut in October. The slowdown in the labor market is also pushing inflationary pressures into the background and supporting the Fed’s cautious stance.

According to Guha, even if the Fed sends cautious messages, consecutive interest rate cuts will remain on the agenda until the end of the year. Markets have already priced in this possibility. Investors are closely following the scenario that the Fed will cut interest rates before the end of the year.

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