Fed Interest Rate Hike Bets Shift Back Towards Keeping Rates Steady

The financial market is now giving a 75% probability that the Federal Reserve will keep interest rates unchanged in July, according to contracts traded on Kalshi. This is up from a 16% chance just last week.

Despite this shift towards keeping rates steady, there's still a significant increase in bets for an interest rate hike, with a 38% probability now compared to 16% previously.

The rise in oil prices due to the conflict between the US and Iran has contributed to this change. Brent crude rose above $100 per barrel before falling back to under $89.

Kalshi contracts also show that there's a 68% probability of another interest rate hike by the Federal Reserve in 2026, indicating a more restrictive monetary policy may be on the horizon.