FED interest rate policy: Cuts or Hikes?
💡 What the odds say
Most likely: Cuts at about a 56% chance — more likely than not.
The field is effectively a two-way coin flip between cuts and hikes, with the recent shift toward hikes driven by a rare internal Fed divide and hawkish minutes, despite President Trump's public pressure for cuts.
📊 Base rate: Since 1990, the Fed has cut rates roughly 40% of the time and hiked about 30% of the time, with pauses making up the remainder, so the current 56% cut odds are slightly above the historical frequency of cuts.
What's driving it
- • A July 23 report highlights a rare divide in the Fed's July decision, with Chair Warsh's new policy style amplifying two-way market risk, which has boosted hike odds as traders price in uncertainty (finance.biggo.com, Jul 23).
- • The Washington Post reported on July 17 that Trump wants rate cuts while more Fed officials signal hikes could be next, creating a political versus institutional tug-of-war that keeps both options alive.
- • Reuters noted on July 8 that Fed policymakers' inflation concerns grew at the June meeting, per the minutes, reinforcing the case for a hawkish hold or hike and pushing hike odds upward.
- • A Chase Bank article on July 15 quoted Chair Warsh saying 'Prices are too high,' which dampened cut expectations by signaling the Fed's priority remains inflation control over political pressure.
Why the front-runners lead
- • Cuts lead at 56% because President Trump's public demand for rate cuts, reported by the Washington Post on July 17, creates political tailwinds that markets expect to influence the Fed's decision.
- • Morgan Stanley's July 17 outlook on a Fed pause suggests markets see a cut as more likely than a hike in the near term, given the fixed-income implications of a pause.
- • The Forbes historical rate review from July 10 shows that cuts have been more common than hikes in recent cycles, anchoring expectations toward a cut as the default move.
Why it's still open
- • Hikes could overtake if upcoming inflation data, such as the July CPI release, comes in hot, reinforcing the hawkish stance seen in the June minutes (Reuters, Jul 8).
- • The rare Fed divide reported on July 23 means any further hawkish commentary from Chair Warsh or other officials could shift sentiment sharply toward hikes, as his new policy style amplifies two-way risk.
- • If the Fed's July decision results in a hike or a hawkish pause, the market could quickly reprice, with hike odds potentially surpassing 50% given the current narrow gap.
What to watch
- • The Fed's July 29-30 meeting decision: a cut would solidify the cut lead, while a hike or hawkish pause would likely flip the odds toward hikes (finance.biggo.com, Jul 23).
- • July CPI data release on August 12: higher-than-expected inflation would boost hike odds, while a soft reading would strengthen the cut case.
- • Any public statement from Chair Warsh between now and the meeting: given his new policy style, a hawkish remark could push hike odds above 50% (Chase Bank, Jul 15).
AI-generated · grounded in recent news + odds · informational only, not advice. Verify on the source platform.
Data from Myriad’s public API, for informational purposes only. PredictPal is not affiliated with any platform and does not facilitate trading.
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Resolved on-chain per the rules written into each market (stablecoin-settled). On-chain settlement is transparent but, like any market, only as good as the rules it was written with.
Resolution criteria
**This market is a collective indicator of sentiment regarding the trajectory of the FED interest rate policy. This market is trading only and will never be resolved towards either option.** **Sentiment Details:** The Federal Reserve Bank of the United States of America has one of the most powerful decisions to make on a regular basis. Cutting, or raising? Or waiting? And while each one of us can only guess and never know, it is the collection of our opinions that will propel this indicator to a constant search of truth and provide opportunity plenty. What will the FED do next? Cut? Or Hike? **Market Details:** **Market Period:** Infinite. **Resolution Criteria:** This market will not resolve. **Resolution Details:** No resolution can be triggered in this market. This market will not resolve based on any FED decision, it will continue to remain open as a constant indicator. **Cancelation (Invalidity) Conditions:** This market will be canceled/invalid if: - Myriad Markets undergoes a change of its contract that demands a cancelation of all active markets, or similar technical or business imperatives. - Myriad Markets decides it is time for this market to cease to exist. In the event of cancelation, participants may claim their stakes at the market value of their open positions at the time of cancelation. This could result in a profit or a loss, depending on the price of their outstanding shares.
ⓘ A market settles under its own written rules, which can lag what looks decided in the news — so the price may not move to 100% the moment an outcome seems obvious.
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