The week ahead: Fetterman, football, and the Fed

Happy Tuesday, traders,

Normally we put this newsletter out on Monday, but we delayed it by a day so we could send out a post about last night’s Emmy Awards.

Favorites won fourteen of the eighteen categories we tracked. But there were also four upsets: Slow Horses beat out Pluribus for Best Drama Directing, Allison Janney topped Katherine LaNasa for Supporting Actress in a Drama, Matthew Rhys took home Lead Actor in a Limited Series over Oscar Isaac, and Sally Field pulled off the night’s biggest surprise, edging out Sarah Pidgeon for Lead Actress in a Limited Series.

But now it’s time to look toward the week ahead.

This includes the market on the decision the Fed will make on Wednesday about interest rates, as well as speculation about Democratic Senator John Fetterman crossing the aisle to join the GOP, and what’s in store for Week 2 of the NFL.

So let’s get into it.

^{For informational purposes only. Not trading advice. See full disclaimer below. Kalshi is not affiliated with the Emmy Awards or the NFL.}

By far the biggest story that we’ll be discussing this week concerns The Fed. The Federal Open Market Committee normally meets eight times per year, every six-ish weeks, for two days to discuss the state of the U.S. economy and eventually decide whether to raise, hold, or cut interest rates. 

Importantly, the Fed is mandated to simultaneously maximize employment and stabilize prices. If you aren’t familiar with economics, when inflation is too high, the Fed generally keeps rates high or raises them to decrease spending and investment, which tapers inflation. Unfortunately, in life and economics, there are no solutions and only compromises. 

When spending and investment decreases, less money moves around the economy making it harder for employers to hire and thus grow their businesses and the economy. In situations like this, cutting rates stimulates economic growth. 

The Fed is in charge of striking a balance between the two which naturally prompts the question:

What do they use to make a decision?

The answer is pretty simple: data from the Bureau of Labor Statistics (BLS) and Bureau of Economic Analysis (BEA). Though the Fed generally prefers the PCE price index to track inflation, the CPI published by the BLS catches more headlines because it focuses on what consumers pay, and late last week the inflation numbers came in hot.

After the core CPI came in hotter than expected, traders reacted instantly and what looked like solid chances for the Fed maintaining the current rate plummeted while the odds of a hike increased substantially. The overall CPI increase was driven largely by gasoline prices, but core prices, which strip out food and energy costs, also rose higher than expected. 

We mentioned above that the Fed generally likes the PCE numbers, but since those won’t be released until Sept. 30, and the Fed decision is on Wednesday, the numbers they currently have are what they’re working with. 

Pennsylvania Democratic Senator John Fetterman caught many members of both parties off guard after participating in a video shown at the Republican National Convention praising Dave McCormick, a Republican senator also from Pennsylvania. 

Naturally, a Democrat’s appearance endorsing a Republican at the RNC coming out of left field stirred up discussions already happening online about whether Fetterman would leave the Democratic party and begin identifying as a Republican. Fetterman has gained notoriety for breaking party lines on a number of high-ticket issues despite voting with Democrats 90% of the time. With the exception of Marjorie Taylor Greene, John Fetterman is traders’ favorite on the market for Who will switch or leave their party this year?

One interesting note for Fetterman is that a poll last month revealed only 23% of registered Democrats have a favorable view of Fetterman, standing in stark contrast to the 73% of registered Republicans who have a favorable view of the senator. Our traders seem to think along similar lines as shown in the Pennsylvania Democratic Senate nominee market for 2028.

Meanwhile, talk of Fetterman leaving his party doesn’t seem to be hurting the chances of the Democrats retaking the Senate in the upcoming midterms. In fact, quite the opposite.

For the first time since April, Democrats are now slightly favored to retake the upper chamber in November. The fact that this shift is happening in the midst of all this Fetterman speculation seems to indicate that traders aren’t taking it very seriously in the short term. But time will tell.

Last but not least, Week 1 of the 2026 NFL season is in the books, and our 2027 pro football champion market has already adjusted.

The Los Angeles Rams are still favored to win it all, but not by much. Their chances dropped from nearly 17% before the season started down to 11%. Meanwhile, the Bills’ chances have crept up to 9%, while Baltimore, San Francisco, and Kansas City are now priced at 8%, 7% and 7%, respectively.

Be sure to check out our NFL Hub to see what’s in store for Week 2, as well as our market-based NFL Power Rankings to see how your favorite team is faring.

Whether you’re into politics, sports, economics, or something entirely standalone, we’re sure there’s markets on Kalshi you’ll find interesting. We hope this week is a good one.

Follow Jack Kuveke at Jabroni Capital
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