The probability of the US Federal Reserve cutting interest rates by 25 basis points in October has surged to 96.8 percent on Polymarket, following the latest Consumer Price Index data release. The CPI report for September showed inflation rising by 0.3 percent month-over-month and 2.8 percent year-over-year, slightly below expectations and signaling cooling price pressure across key sectors such as energy and food.
This shift has fueled market conviction that the Fed is ready to begin easing monetary policy after maintaining high rates for an extended period to combat inflation.
Traders are now betting that the first rate cut will arrive at the upcoming October 29 meeting, marking a potential turning point in US monetary policy.
If confirmed, this move would end the longest pause in tightening since the pandemic era and could provide much-needed support to both equity and crypto markets, which have been anticipating a shift toward lower borrowing costs.
The data-driven sentiment aligns with growing investor belief that the economy is stabilizing, allowing the Fed to pivot from fighting inflation to protecting growth.