The odds of the Federal Reserve implementing an emergency rate cut soared dramatically on the prediction platform Polymarket as stocks and cryptocurrencies tumbled over tariff concerns.
What Happened: Bets in favor of the contract titled "Fed emergency rate cut in 2025?" rose from 20% to 36% over the last 24 hours on the Polygon POL/USD-based platform. As of this writing, the odds had fallen to 28%, but they were still significantly higher than the 16% a week before.
Over $149 million has been wagered on the outcome. The market will resolve to "Yes" if the central bank holds an emergency meeting in between its eight scheduled meetings in a year and lowers the federal funds rate.
Emergency meetings happen during periods of economic crisis. The bank held an emergency meeting in March 2020 in reaction to the risk posed by the COVID-19 pandemic to the U.S. economy.
Meanwhile, the odds of a recession in 2025 soared to 63%, up from 39% a week ago. This market will resolve to "Yes" if the National Bureau of Economic Research declares a recession in the U.S. before Jan. 1, 2026.
Note that Polymarket is not available to U.S. residents due to regulatory hurdles.
Why It Matters: Stock futures and cryptocurrencies recorded a "Black Sunday" as concerns over President Donald Trump's aggressive tariff measures deepened. Bitcoin BTC/USD, the world's largest cryptocurrency, slipped below $80,000.
Last week, Trump publicly urged Fed Chair Jerome Powell to cut interest rates. However, the Fed appeared in no rush to move.
Powell adopted a cautious stance, hinting that slowing economic momentum is not yet enough to ease the Federal Reserve’s inflation concerns.
As of this writing, the Fed's target range remains at 4.25% to 4.50%.
Image via Shutterstock
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