Prediction markets put roughly four-in-five odds on a 25 basis point increase Wednesday, which would be the first rate rise since 2023.
The Federal Open Market Committee meets Tuesday and Wednesday, with the policy statement and Summary of Economic Projections due Wednesday at 2:00 p.m. ET and Chair Kevin Warsh's press conference at 2:30. Warsh was confirmed by the Senate on and sworn in as chairman on , and the FOMC selected him as its chairman unanimously. Wednesday is his first decision with a genuinely contested outcome and a market that has moved decisively in one direction.
That direction is up. Across prediction markets on Monday, Polymarket's Fed contract showed 79% for a 25 basis point increase against 21% for no change, Kalshi showed 78.5%, ForecastEx 78%, OG 80% and Gemini 75.5%, with one aggregator putting the composite near 79.4%. The figures are tightly clustered, which is itself informative, though readings across trackers and across dates have varied widely enough this month that no single number should be presented as a consensus. Each figure above belongs to the platform named beside it.
What moved the pricing
Inflation data. A firmer-than-expected core CPI print and a 0.4% monthly rise in August producer prices are the proximate drivers behind the shift toward hike-implied pricing. The oil move covered elsewhere in this batch is the live second input, feeding directly into the inflation expectations the committee will be looking at.
It is worth noting how far this has traveled. In mid-August, Goldman Sachs chief economist Jan Hatzius argued that market pricing for the funds rate was too hawkish, a comment made against a then-current reading of roughly 30% for a September hike. That view was formed before the current energy shock and before the most recent inflation prints. It is a useful marker of how quickly the expected path has reset, not a live contradiction of Monday's pricing.
The wider central-bank context
The European Central Bank raised rates by 25 basis points on . If the Fed follows on Wednesday, two of the three largest developed-market central banks will have tightened inside a week, against an energy shock that is still unresolved.
What actually matters on Wednesday
The decision itself is the smaller question. The Summary of Economic Projections is the larger one, because it says whether the committee sees this as a one-off response to an energy shock or the start of a path. Warsh's framing at the press conference will be read the same way. And the long end, which reached 5% on Monday, is the test of whether the committee's answer is believed.
Retail sales and August import prices land the same morning, at 8:30 a.m. ET, giving the market a consumer-demand read hours before the decision.