What Prediction Markets Are Forecasting

Traders on Polymarket currently see only a 1% chance that a quarter-point interest rate cut becomes the more likely outcome than no change at the Federal Reserve's March meeting. This means the collective view is near-certain that the Fed will not signal a cut as its expected March action by the end of February. In simple terms, the market is saying there is roughly a 99 in 100 chance that "no change" remains the favored prediction right up until the March decision itself.

Why the Market Sees It This Way

Two main factors explain these overwhelming odds. First, recent economic data, particularly on inflation and job growth, has remained stronger than many expected. The Fed has clearly stated it needs more confidence that inflation is moving sustainably toward its 2% target before cutting rates. Current data hasn't provided that clear signal. Second, Fed officials themselves, including Chair Jerome Powell, have pushed back in recent public comments against expectations for very early rate cuts. Their consistent messaging is that the committee can afford to be patient, which traders are taking literally. Historically, the Fed also avoids making major policy shifts right before the quiet period ahead of meetings, making a last-minute dramatic shift in expectations before February 28 very unusual.

Key Dates and Events to Watch

The deadline for this specific derivative is February 28. The main events that could theoretically shift the underlying March meeting odds before then are the release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) report, on February 29, and continued speeches by Fed officials. However, the PCE report comes after this market's cutoff, and officials enter a communication blackout period several days before the March meeting. In practice, this means there is very little scheduled news that could change trader consensus in the narrow window before February 28.

How Reliable Are These Predictions?

For Fed policy decisions, prediction markets like Polymarket have a reasonably strong track record. They aggregate a wide range of views, including those of participants closely parsing Fed statements and economic data. However, they are best at reflecting the consensus view right now, not predicting surprises. The 1% probability here shows traders see almost no plausible path for new information to suddenly make a March cut the expected outcome in the next week. The main limitation is that these markets can sometimes overreact to single data points or headlines, but the extreme odds in this case show a high degree of conviction in the current narrative.