Fed December Rate-Hike Odds Fall to 67% After U.S. Midterms; Hold Seen at 33%
JH Kim
Summary
- Expectations for a Federal Reserve benchmark rate increase in December weakened after the U.S. midterm elections.
- The probability of a December rate increase in prediction markets fell to 67% from more than 80%, while the probability of a rate hold rose to 33%.
- Prediction markets still reflect the possibility of a rate increase as higher than a rate hold, and the figures may change depending on trading.
Forecast Trend Report by Period
Expectations for a Federal Reserve benchmark rate increase in December have weakened since the U.S. midterm elections. In prediction markets, the odds of a rate hike fell to 67% from more than 80%.
Walter Bloomberg reported on November 5 that the probability of a Fed rate increase in December dropped to 67% after the midterm results were announced. The odds of rates being left unchanged rose to 33%.
The probability of a hold is the highest since mid-September. Even so, prediction markets still show a rate increase as more likely than no change.
The shift in probabilities came after the U.S. midterm elections, and the prediction-market figures may change depending on participants' trading.
JH Kim
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