Polymarket traders increased their bets on a September rate hike before the release of the U.S. August Consumer Price Index, according to PPP prediction market tracking data. The probability of the Federal Reserve raising rates by 25 basis points in September climbed to 61%, up 8% over the past 24 hours. At the same time, the probability of the Fed leaving rates unchanged fell to 40%, down 8% over the same period.
The U.S. Department of Labor is scheduled to release August CPI data at 20:30 Beijing time tonight. Market expectations cited in the source point to headline CPI rising 0.4% month over month and 3.4% year over year, while core CPI is expected to increase 0.2% month over month and 2.4% year over year. The report is seen in the source as an important reference for whether the Federal Reserve will deliver its first rate hike in more than three years at next week’s meeting. The Fed’s last rate increase came on July 26, 2023, when it lifted the federal funds target range by 25 basis points to 5.25%–5.50%.
PPP prediction market tracking data showed that before the CPI release, the probability on Polymarket of the Federal Reserve raising rates by 25 basis points in September rose to 61%, up 8% over the past 24 hours. The probability of no change fell to 40%, down 8% over the same period.
August CPI due tonight
The U.S. Department of Labor is set to release August CPI data at 20:30 Beijing time tonight. Market expectations in the source call for headline CPI to rise 0.4% month over month and 3.4% year over year. Core CPI is expected to increase 0.2% month over month and 2.4% year over year.
Key input for next week’s Fed decision
The data will serve as an important reference for whether the Federal Reserve makes its first rate hike in more than three years next week, according to the source.
The Fed last raised rates on July 26, 2023, delivering a 25-basis-point increase that took the federal funds target range to 5.25%–5.50%.
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