A trader just put $26,954 into contracts betting against "Exactly 1 cut" in a "Will the Fed cut rates 1 times?" market.
This is one of the largest trades we have seen on a prediction market over the last day.
Market Context
This contract comes from Kalshi’s prediction markets, which allow traders to bet on the outcome of specific events. From our prediction market tracking, the trade was made on 10/01 at 10:52 AM EST when the market was giving a 95% chance of their bet paying off.
There have been 58,556 contracts traded in this market in the last day.
Market Rules
Here are some of the rules that were given for the market:
If the Fed cuts 1 times before 2026, the market resolves to Yes. To be clear, 25bp of cuts is equal to one cut (so 25bp cut is 1, 50bp cut is 2, 75bp cut is 3, and so on). Note: this detail has been included in past iterations including the previous iteration titled, "Number of rate cuts in 2024?"
You can find up-to-date information on Kalshi.
Why this matters
Prediction markets provide a dynamic and real-time gauge of market sentiment regarding future economic policies and events, such as central bank rate decisions. These markets aggregate diverse information from participants, effectively synthesizing expectations about economic outcomes that influence financial markets globally.
Fed rate decisions are critical economic indicators that impact everything from borrowing costs to investment strategies. The ability to trade on the likelihood of specific rate cuts allows investors and policymakers to better assess risk and anticipate shifts in monetary policy, contributing to more informed decision-making across the financial ecosystem.
