Gamblers Split on Fed Rate Cut Basis Points Amount

It's no longer a question of if, but when.

That "when" is likely to be announced on September 18.

It’s likely to be just the first in a series of rate cuts that should make borrowing more affordable now that the Fed has deemed high inflation to be all but defeated.

For its part, the betting markets seem torn between a 25 basis points decrease and a 50 basis points decrease.  The latter is becoming more favored.

Chair Jerome Powell emphasized in a speech last month in Jackson Hole, Wyoming, that the Fed is prepared to cut rates to support the job market and achieve a notoriously difficult “soft landing.” That is when the central bank manages to curb inflation without tipping the economy into a steep recession and causing unemployment to surge.

How This Market Will Resolve

The FED interest rates are defined in this market by the upper bound of the target federal funds range. The decisions on the target federal fund range are made by the Federal Open Market Committee (FOMC) meetings.

This market will resolve to “Yes” (at Polymarket) if following the Federal Reserve's September 2024 meeting the upper bound of the target federal funds rate is decreased by 50 or more basis points below the level it was prior to the meeting. Otherwise, it will resolve to “No.”

The resolution source for this market is the FOMC’s statement after its meeting scheduled for September 17 - 18, 2024 according to the official calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.

The level and change of the target federal funds rate is also published at the official website of the Federal Reserve at https://www.federalreserve.gov/monetarypolicy/openmarket.htm.

This market may resolve as soon as the FOMC’s statement for their September meeting with relevant data is issued. If no statement is released by November 6, 2024, 11:59 PM ET, this market will resolve to the "No change" bracket.