9.9.25
More Kalshi traders are pricing in three interest rate cuts in 2025 after fresh evidence of labor-market cooling and mounting pressure on the Fed from President Trump. The market for “Number of rate cuts in 2025” now prices Exactly 3 cuts at 39% (up 18 points), nearly even with Exactly 2 cuts at 41% (down 3 points). Exactly 4 cuts is 10% (up 5 points), while Exactly 1 cut fell to 10%.
The near-term view remains that the Fed will start with a quarter-point reduction at next week’s meeting. In the “Fed decision in September” market, Cut 25 bps trades at 79% (down 6). Cut greater than 25 bps is 16% (up 4), while Hold is 5% (up 1).
9.9.25
Odds that the Fed delivers a reduction of more than 25 bps at some point this year are 28% (up 4.2 points), reflecting a modest rise in tail risk for a larger move at one of the remaining meetings.
9.9.25
The repricing followed a Reuters report that the Bureau of Labor Statistics’ preliminary benchmark revision shows the economy created about 911,000 fewer jobs in the 12 months through March than previously estimated. That implies average monthly gains were likely below the previously reported 147,000, reinforcing the case for policy easing in September and again later this year.
Political pressure also added to the mix. Newsmax reported that President Donald Trump amplified comments from market strategists calling for aggressive easing of 50 to 100 basis points. In a Truth Social post, Trump cited Greg Faranello’s view that the Fed “needs to come down” and criticized Chair Jerome Powell for moving too slowly. Trump also quoted Jay Hatfield, who argued the Fed’s framework is outdated.
Even with louder calls for a larger reduction, Kalshi pricing shows traders still see a standard quarter-point cut as the baseline for September.
All eyes on CPI: Traders expect a year-over-year reading near 2.8% in Wednesday’s August report. Kalshi’s market shows 66% odds of above 2.8% and 23% for above 2.9%. A print at or below 2.8% would strengthen the case for a 25 bps cut next week and keep three cuts in 2025 in play; 2.9% or higher would tilt pricing back toward two.
This article may contain content generated with the assistance of artificial intelligence. It is provided for informational purposes only and does not constitute investment, trading, financial, or legal advice. Any opinions or market commentary are not recommendations. Trading involves risk and you should carefully evaluate your financial situation and consult a qualified advisor before making any trading decisions.