Kalshi Traders Predict 54% Chance of September Rate Hike

Kalshi traders now predict that the Federal Reserve will raise interest rates by 25 basis points in September, with a probability of 54%. This is up from previous predictions, and contrasts with the current rate setting committee's decision to leave interest rates unchanged this month.

The Fed's decision was met with dissenting voices, as three governors favored a quarter-point increase. Persistent inflation appears to be one reason traders expect the Fed could raise rates in September, with the New York Times' Ben Casselman noting that inflation has remained elevated for 63 months.

The CME Group's FedWatch Tool also shows a 55.9% probability of a September rate hike, compared with 44.1% for no change. Oil prices have surged recently, topping $100 a barrel, and could keep inflation elevated in the near term, according to experts.