Prediction markets are signaling a sharp increase in the odds of a surprise Federal Reserve rate hike. On Polymarket, the probability of no change fell 8.9 percentage points to 73.25%, while the odds of a 25-basis-point increase jumped 9.7 points to 26.65%. Fed-funds futures also reflected this nervousness, pricing the chance of a hike at 38.8% Monday afternoon. Such a move would raise the Fed’s target range from 3.50%-3.75% to 3.75%-4.00%. The FOMC meets on July 28-29.
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