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Fed rate hike in 2024?

This market will resolve to “Yes” if the upper bound of the target federal funds rate is increased at any point between April 25 and December 18, 2024's Fed meeting. Otherwise, this market will resolve to “No.” This market may not resolve to "No" until the Fed has released its rate changes information following its December 18 meeting. The primary resolution source for this market will be the official website of the Federal Reserve (https://www.federalreserve.gov/monetarypolicy/openmarket.htm), however a consensus of credible reporting may also be used.

Event Details

Total Volume: $413.9K
24h Volume: $126
Total Liquidity: $135.6K
Markets: 1
Event Ends: 12/18/2024

Event Analysis

Summary

The Federal Reserve's monetary policy direction for 2024 has become increasingly clear, with a strong consensus forming around the unlikelihood of any rate hikes during the specified period (April 25 to December 18, 2024). This assessment is supported by the Fed's own projections, market expectations, and analysis from major financial institutions. The Fed's pivot from its previous hawkish stance is evident in recent communications and economic projections, with officials now signaling potential rate cuts rather than hikes in 2024. This shift is driven by encouraging trends in inflation data, stable economic growth, and a balanced labor market. The combination of these factors, along with the Fed's current positioning at a restrictive 5.25-5.50% target range, suggests very limited circumstances under which additional rate hikes would be warranted.

Analysis

Economic Background

Current Monetary Policy Stance

  • Federal funds rate currently at 5.25-5.50% target range
  • Fed has maintained rates at this level for several consecutive meetings
  • Policy stance considered restrictive, aimed at bringing inflation to 2% target

Economic Conditions

  • GDP growth showing resilience (2.1% projected for 2024)
  • Inflation trending downward with core PCE expected at 2.4-2.6%
  • Unemployment rate stable around 4.0%

Outcome Analysis

Scenario 1: Rate Hike (1.2% Probability)

Requirements:

  • Significant inflation resurgence
  • Unexpected economic overheating
  • Major external shock requiring tighter policy

Challenges:

  • Contradicts current Fed guidance
  • Would reverse progress on inflation
  • Could risk economic stability

Scenario 2: No Rate Hike (98.8% Probability)

Supporting Factors:

  • Fed projections showing rate cuts in 2024
  • Declining inflation trajectory
  • Stable economic growth
  • Market consensus alignment

Key Factors to Watch

  1. Inflation Metrics

    • Core PCE trends
    • Consumer price expectations
    • Wage growth data

  2. Economic Indicators

    • GDP growth rate
    • Labor market conditions
    • Financial stability measures

  3. External Factors

    • Geopolitical developments
    • Global economic conditions
    • Commodity price trends

Recent Developments

  • March 2024 FOMC projections maintain dovish outlook
  • Market pricing reflects expectations of rate cuts
  • Major institutions (Goldman Sachs, Bank of America) forecast cuts rather than hikes

Prediction

I predict with high confidence (9/10) that the Federal Reserve will NOT raise rates between April 25 and December 18, 2024. The probability of a rate hike is estimated at 2%, while the probability of no rate hike is 98%. This assessment is based on clear Fed guidance, economic projections, and market consensus. Only a significant unexpected shock to the economy would likely trigger a rate hike during this period.

Fed rate hike in 2024?

Yes:2.0%
No:98.0%
Confidence: 9/10
Reasoning Score: 8/10

Sources

Market Options

Fed rate hike in 2024?

Yes
1.3%
No
98.8%
Liquidity: $135.6K
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