Traders on the prediction markets platform Kalshi have raised the odds of a Federal Reserve interest rate hike this year to 57%, up from 35% earlier in the week.
This change follows a meeting of the Federal Open Market Committee, where officials decided to keep interest rates in the 3.5%-3.75% range but indicated a potential shift in their outlook, moving away from previous expectations of rate cuts. Notably, nine out of 18 officials anticipate that the federal funds rate will be above the current range by the end of 2026, with a median projection of 3.8%.
Fed Chairman Kevin Warsh, in his inaugural meeting, refrained from providing a specific rate forecast, stating that such projections are not helpful for policy conduct. The committee's statement was notably revised to remove language suggesting future cuts, reflecting a more hawkish stance.
The next meeting is scheduled for July 28-29, which will be closely watched by investors for further indications of the Fed's monetary policy direction