A trader just put $44,500 into contracts betting on "Cut 25bps" in a "Will the Federal Reserve Cut rates by 25bps at their October 2025 meeting?" 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 10/02 at 02:41 PM EST when the market was giving a 89% chance of their bet paying off.
There have been 263,384 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 Federal Reserve does a Cut of 25bps on October 29, 2025, then the market resolves to Yes. This market is mutually exclusive. Therefore, if the Federal Reserve hikes by 50bps, the 50bps market will resolve to Yes and the 25bps market will resolve to No. Only one bucket, at maximum, can resolve to Yes. Note 4/28/25: For the markets beginning after the May meeting, if a scheduled FOMC meeting is canceled and does not occur on its scheduled date, then the strike for "Fed maintains rate" will resolve to Yes and all others will resolve to No.
You can find up-to-date information on Kalshi.
Why this matters
Prediction markets focusing on Federal Reserve rate decisions play a crucial role in providing real-time insights into market expectations for monetary policy. These markets aggregate diverse investor views, offering a transparent and quantifiable gauge of consensus on potential Federal Reserve actions.
Understanding and anticipating Federal Reserve policy moves is essential for financial institutions, investors, and policymakers due to the significant impact these decisions have on global markets. Prediction markets that track rate cut or hike probabilities thus serve as vital tools for risk management and strategic planning across the financial ecosystem.
