Market expectations for the Fed’s interest rate decision in March have been updated.
Pricing on the forecasting platform Polymarket revealed that investors are largely focused on the scenario where interest rates will remain unchanged.
According to platform data, the probability of no change in interest rates at the March meeting is priced at 96 percent.
In contrast, the probability of a 50 basis point or more interest rate cut is seen as 1 percent. A 25 basis point rate cut is priced in with a 2 percent probability.
On the interest rate hike side, the probability of an increase of 25 basis points or more is still projected at around 1 percent.
On the other hand, statements from the Fed are limiting expectations of interest rate cuts in the short term. Austan Goolsbee, a voting member of the Fed, stated that an interest rate cut would not be appropriate in the near future without more evidence of a sustained decline in inflation.
In a prepared speech for the National Association of Business Economics’ annual conference on February 24, Goolsbee said that further interest rate cuts this year could be possible if concrete progress is seen towards inflation being on a sustained path toward the 2 percent target.
*This is not investment advice.