Federal Reserve Prediction Market Preview: What Will Jerome Powell Say At The FOMC?

Donald Trump said Monday that “a third-grade student” would know it’s time to cut rates and called for an emergency Fed meeting. Jerome Powell will respond at 2:30 p.m. ET today.

Polymarket traders have put $500 million behind a 99.7% chance the Fed holds at 3.50%-3.75%.

Oil near $100 a barrel is pushing inflation up while the labor market is cooling with a 92,000-job loss in February.

The Fed can’t cut without pouring fuel on inflation and can’t hike without crushing an already weakening jobs picture, so they’re frozen.

Polymarket’s dissent markets give a 94% chance Stephen Miran votes against the hold and 78% for Christopher Waller to join him. Both dissented in January. If a third governor breaks ranks, that will make the news.

What Powell Will Say

On Kalshi, traders are betting on which specific words Powell uses at the lectern. “Oil” is at 84% and “layoff” at 85%, the two forces pulling the committee apart.

“Shock” has surged 18 points to 56%, suggesting Powell frames the Iran conflict explicitly as a supply shock. But “Iran” itself has dropped 16 points to 56%, a bet he opts for diplomatic Fed-speak instead.

“Slowdown” has cratered 45 points to 44%, the biggest swing on the board and a hawkish signal that Powell avoids recession-adjacent language.

“Trump” at 6%. “Renovation” at 5%.

U.S. Attorney Jeanine Pirro is pursuing a DOJ investigation into a Fed headquarters renovation project, and Sen. Thom Tillis has vowed to block all Fed nominations until the probe is resolved.

Polymarket’s “Warsh confirmed by May 15” contract sits at just 62%. If the block holds, the Fed could enter a leadership vacuum when Powell steps down in May.

How Many Cuts This Year?

Polymarket’s “How many rate cuts in 2026?” contract prices one 25-basis-point cut as the leading outcome at 30%, with zero cuts close behind at 24%.

A Fed working paper published last month found Kalshi achieved a perfect forecasting record on the day before each FOMC decision since 2022. Today’s hold is locked. What the dot plot shows about the rest of 2026 isn’t.

Before the war in Iran pushed oil higher, the race was between one and two rate cuts. How fast Trump can finish the conflict will determine how many rate cuts his chosen successor can push through.

Ray Dalio says that the Iran war comes down to a single variable: who controls the Strait of Hormuz, and this is a classic symptom of the declining stage in his?macroeconomic "Big Cycle" framework.

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