Polymarket Traders See 32% Chance of No Fed Rate Cuts This Year

Polymarket, a blockchain-based betting site, is indicating that there is a 32% chance of the U.S. Federal Reserve keeping interest rates unchanged this year. This is a significant increase from the 7% probability seen just a month ago. The shift in market sentiment towards a more hawkish stance could impact the demand for risk assets, including cryptocurrencies and technology stocks. This change in expectations aligns with traditional markets, where traders are now predicting only two rate cuts in 2024, compared to the initial expectation of six cuts in early January. Analysts believe that the anticipation of swift rate cuts was a driving factor behind Bitcoin’s surge in the first quarter. However, the uptrend in Bitcoin has stalled in recent weeks due to the changing expectations of rate cuts. The latest data, including strong jobs reports and higher-than-expected inflation, has weakened the case for immediate rate cuts. Federal Reserve Chairman Jerome Powell has also indicated that rate cuts may not happen any time soon, and other Fed officials have expressed a lack of urgency to reduce rates. Overall, there is a growing belief that the Fed will hold rates steady, which could have implications for the broader economy and financial markets.