After months of power struggles with Donald Trump, the US Federal Reserve (Fed) has just decided to lower its key interest rates by 0.25%. This highly anticipated decision caused betting volume on the Polymarket prediction market platform to skyrocket.
Polymarket: $220 million on the Fed’s decision
For many months, Donald Trump has been putting enormous pressure on the chairman of the US Federal Reserve (Fed), Jerome Powell, to initiate a cut in key interest rates. This strategy, combined with insults and threats of dismissal, has finally paid off, with a 0.25% cut announced yesterday at the end of the day.
This situation was closely watched by the financial markets, both for the positive impact of a possible cut and for the risk of the Fed losing its independence if it follows the instructions imposed by the US president.
It is in this highly tense context that bettors on the Polymarket prediction market once again broke records, with a vote on the Fed’s decision for September reaching a volume of over $220 million just before the deadline.
This situation was quickly relayed on Polymarket’s X account yesterday at the end of the day, when the amount had just exceeded $200 million a few hours before the Fed’s announcement. At that point, more than 90% of the bettors involved were expecting a 25 basis point (bps) cut.
The largest FOMC prediction market in history
The Polymarket platform had its moment of glory during the presidential campaign between Kamala Harris and Donald Trump. And with good reason, as the prediction market entitled Presidential Election Winner 2024 alone accumulated a historic—and as yet unmatched—volume of over $3.6 billion.
However, the $220 million recorded on the Fed’s recent decision is also a notable record, presented by Polymarket as “the largest FOMC (Federal Open Market Committee) prediction market in history.”
This Fed decision did not allow Polymarket’s star trader, JustWakingUp, to win the $226,000 he had hoped for on his $15,000 bet on a 50-basis-point cut in key interest rates.
