Federal Reserve policymakers are split on where interest rates should go next, and Kalshi traders are nearly as divided.
Prediction market traders on Kalshi now see a 54% chance that the Fed will raise rates before the end of the year, down from 56% over the past day. The same market gives nearly 80% odds that a hike will happen by 2028 and a 62% chance that it will happen before July 2027.
The odds follow the release of the Fed’s June meeting minutes, which showed policymakers divided over the rate path. The central bank held its target range for the federal funds rate at 3.5% to 3.75% at the June meeting.
The minutes said that many participants believed the appropriate level of the federal funds rate would be within or slightly below the current target range by the end of this year. But many others said the rate should be above the current range, leaving the Fed without a clear consensus on whether the next move should be tighter or easier.
The split comes as the US economy faces renewed inflation pressure and rising geopolitical risk. The Fed’s preferred inflation gauge, the personal consumption expenditures price index, reached an annual rate of 4.1% in May, its highest level since April 2023.
