After the latest PCE data was released, odds on Polymarket for a 25 basis point Federal Reserve rate hike in October fell to 32%, down 10% over the past hour, according to monitoring by the PPP prediction market tool. At the same time, the probability of the Fed keeping rates unchanged rose to 69%, up 10% in one hour.
The move came after the U.S. core PCE price index for August came in at 3% year over year. The reading was slightly lower than the previous month, below the market expectation of 3.3%, and marked the lowest level since February. The update pointed to softer inflation than expected.
The source also noted that ADP employment growth beat expectations, while U.S. Treasury yields moved slightly higher. The shifts in prediction market pricing reflected how traders adjusted their bets following the data release.
Odds on Polymarket for a 25 basis point Federal Reserve rate hike in October fell to 32% after the latest PCE data was released, down 10% in the past hour, according to monitoring by the PPP prediction market tool.
At the same time, the probability of the Fed leaving rates unchanged rose to 69%, up 10% over one hour.
Core PCE came in below expectations
The U.S. core PCE price index for August was 3% year over year. The reading edged lower from the previous month, came in below the market forecast of 3.3%, and marked the lowest level since February.
Other data points
The source also said ADP employment growth exceeded expectations, while U.S. Treasury yields moved slightly higher.
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