[FOMC countdown, decision imminent]
The U.S. Federal Reserve’s two-day September meeting enters its final hours today. The interest-rate decision is scheduled to be released at 2:00 p.m. Eastern Time, after which Chair Warsh (Kevin Warsh) will hold a press conference at 2:30 p.m. If this time the Fed really raises rates by one quarter point (25 basis points), the target range for the federal funds rate would be increased from 3.50%~3.75% to 3.75%~4.00%—the first rate hike since July 2023. This is also the most discussed topic on Binance Square over these two days, with far more views than any other subject.
[CME vs. prediction markets: the estimated odds differ by nearly a factor of two]
The CME FedWatch tool’s currently estimated probability of a rate hike is between 84% and 91% (there are slight discrepancies depending on the timing of different data sources). Among 101 economists surveyed by Reuters, 86 (about 85%) also expect a rate hike. But if you shift your perspective to prediction markets that involve real money bets, such as Kalshi and Polymarket, the implied probability of a rate hike for the same decision is only about 48% to 49%—roughly half of the CME valuation. For the same event, the probabilities estimated by the two sides differ by nearly a factor of two. This suggests that the market’s view of the actual outcome of this decision is even more uncertain than what a “nearly 90% chance” on the surface would imply.
【Chair rarely skips the dot plot】
More than the probability figures themselves, the key thing to watch this time is what Waller does: he broke with precedent by not submitting his own forecast for the path of interest rates (dot plot). His exact words were, “This time, I do not intend to give my forecast.” The June dot plot showed that among 18 officials, 9 thought there would be at least one more 25-basis-point hike this year, which corresponds to an estimated federal funds rate of about 3.8% by year-end. Analysts generally believe that more than whether the Fed hikes or not, what Waller will say about the subsequent path at the press conference—and whether the dot plot today will be filled in to make up for the omission—is what will truly drive the market next.
【BTC spot ETF flows turn from outflows to inflows】
Before the decision was released, the crypto market also showed a new signal: on September 14, Bitcoin spot ETFs saw net inflows of $159.9 million in a single day (IBIT contributed $134.3 million, and FBTC contributed $53.3 million). This ended the downturn trend from the prior week, which had seen outflows for four consecutive trading days, totaling about $462 million to $463 million. At the same time, the yield on the 10-year Treasury retreated last Friday from near its 5% high to 4.93%, but overall it remains a key variable weighing on risk appetite in crypto.$BTC At the current price range of $75,000 to $77,000,$ETH and with trading consolidating around the $2,500 level, both are stuck in a wait-and-see posture ahead of the decision release.
【Key items to watch next】
The fact that CME data and prediction markets assign two sharply different probabilities to the same FOMC decision is the most notable phenomenon of this FOMC—no matter which side the final outcome ends up matching. Market disagreement beforehand is fairly high, and the reaction in the first minutes after the decision is released may be even more intense than what the probability numbers suggest. Beyond the binary outcome of whether there is a rate hike, the tone Waller uses at the press conference, whether the dot plot will be supplemented, and whether the 10-year yield will retest the 5% threshold are all developments worth tracking over the next few hours to days.