Global markets are holding their breath: As the countdown to the Fed’s interest rate decision continues, investors’ expectations are becoming clearer.
Prediction market pricing indicates it is almost certain that interest rates will remain unchanged at the April meeting.
Investors are pricing in a nearly 100% chance that the Fed will keep interest rates unchanged, according to Polymarket data. In contrast, the possibility of a rate hike, such as a rate cut of 25 basis points or more, remains largely negligible in the market. This chart shows that the “wait-and-see” approach that has been reinforced in recent weeks is also reflected in market forecasts.
The market is paying attention not only to interest rate decisions, but also to the message sent by Federal Reserve Chairman Jerome Powell. Powell’s comments could contain important signals about the future of monetary policy, especially as his term nears its end.
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Pricing on the Calci Forecasting Platform reveals expectations for Mr. Powell’s tenure. Investors now expect a 30% chance that Mr. Powell will resign from the Fed’s board by June, rising to 66% in August and 81% by the end of the year. If Powell continues in his role through August, it is expected that he may continue to chair the June and July meetings.
Meanwhile, Polymarket data suggests Powell’s resignation could happen sooner rather than later. Investors on the platform have priced in an 87% chance that Powell will step down between May 15 and May 22.
*This is not investment advice.
