Fed January Hike Odds Jump to 46%

Prediction Markets: United States

Traders no longer think the Federal Reserve will stop after one rate hike. They now put the odds of a second quarter-point increase in January at nearly a coin flip.

Bettors have been pricing a Fed rate hike in December. Now they are looking at the meeting after that: on Polymarket, the chance of a quarter-point hike at the January meeting rose from about 18% a day earlier to 46% on Tuesday morning.

For US readers, this is a bet on how long borrowing costs keep climbing. A second hike would feed straight into mortgage rates, car loans, credit cards and the dollar.

What Prediction Markets Say

The Polymarket market “Fed Decision in January?” asks what the Fed will do at its first meeting of 2027. At 11:40 a.m. ET on 10 November, traders priced the outcomes this way:

•No change: 52%, down about 25 points in 24 hours and 17 points in seven days.

•Quarter-point (25 basis point) increase: 46%, up 27.5 points in a day and 20.5 points in a week.

•Half-point or larger increase: 0.7%. Any cut: under 1%.

About US$328,000 changed hands on this market in the past 24 hours, and US$1.62 million in total, so it is a reasonably active market but far smaller than the December one. Kalshi, an exchange regulated in the US by the CFTC (Commodity Futures Trading Commission), lists a January fed funds contract, but it is thinly traded: its “above 4.25%” line showed bid and ask prices of 32 and 47 cents, with 434 contracts traded in 24 hours.

We do not rely on it. For comparison, the December market on Polymarket (US$23.6 million traded) gives a quarter-point hike 84.5%, a half-point or larger hike 10.8% and no change 4.4%.

We covered that market earlier today.

Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.

Why the Odds Moved

No single trigger was reported for the January move. It came on a day with two relevant events, and the timing fits, but a bet is not proof of cause.

First, Fed Governor Christopher Waller, a member of the Fed’s Board, spoke in London on 10 November, hours before the inflation data came out. He said he was “leaning toward supporting an increase in our policy rate of 25 basis points” at the December meeting.

He also said a half-point hike “should be considered” in December if core inflation looked like the past two months, “around 0.3 percent or even higher”. He added that hiking only 25 basis points “would put our credibility at risk.”

His speech did not mention January. Second, the US Bureau of Labor Statistics (BLS) released its Consumer Price Index (CPI), the main US inflation gauge, for October at 8:30 a.m. ET.

Prices rose 0.4% in the month, after 0.6% in September, and core prices, which exclude food and energy, rose 0.3%, the same pace as in August and September. The BLS did not publish an overall 12-month rate for October because it collected no data in October 2025, during a lapse in government funding.

A core reading of 0.3% sits exactly at the level Waller named. Polymarket’s hold price slid from 78.5% on Monday evening to 71.5% before the release, then to about 52.5% by late morning, so roughly three-quarters of the fall came after the data.

The Fed’s own meeting record gives more context: on 28 October the Federal Open Market Committee (FOMC), its rate-setting panel, held its target range at 3¾% to 4% by a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point increase.

What It Means for US Readers

If a hike in December is followed by another in January, the Fed’s target range would reach 4¼% to 4½%. That would keep mortgage and credit-card rates high into the spring.

Savers would earn more, while borrowers and companies with floating-rate debt would pay more. A higher rate path also tends to support the dollar, which makes imports cheaper for Americans but US exports and overseas earnings less competitive.

Investors in bonds and growth stocks usually feel rate surprises first. Our Global Economy Briefing and the report on the jobs-data jump in December odds track how that pressure built.

What It Means for Latin America and Africa

Higher US rates generally make dollar debt more expensive for governments and companies in Latin America and Africa. They also tend to pull investment money back toward US assets and weaken emerging-market currencies.

Countries that borrow in dollars, such as oil and metal exporters with large bond issues, feel this most. A longer run of Fed hikes would also reduce room for central banks in Brazil, Mexico or South Africa to cut their own rates.

How far that happens depends on each country’s inflation and currency, and no market we read prices that directly. See our prediction markets hub for the live boards.

What Is Not Known

Nobody knows yet how the Fed read the October inflation data, because Waller spoke hours before it appeared. The January market is also sensitive: a single quiet week of data could push it back toward a hold.

Policymakers have not signalled a January decision, and the Fed’s January dates are tentative until confirmed at its December meeting. Prediction-market prices are bets, not forecasts by The Rio Times, and they can reverse quickly.

Frequently Asked Questions

What are traders expecting from the Fed in January?

On Polymarket at 11:40 a.m. ET on 10 November, a hold was priced at 52% and a quarter-point hike at 46%. Those prices are bets, not forecasts by The Rio Times.

Why did the January odds change so fast?

No single cause was reported. The move came on a day with Governor Waller’s speech backing a December hike and the release of October inflation data, and most of it followed the data.

What did the latest US inflation data show?

The BLS said prices rose 0.4% in October after 0.6% in September, and core prices rose 0.3%. It did not publish an overall 12-month rate for October.

When does the Fed meet next?

The Fed meets on 8 and 9 December 2026. Its next meeting is tentatively set for 26 and 27 January 2027.

Is Polymarket a poll?

No. Polymarket prices come from real-money bets, and Kalshi is a separate exchange regulated in the US by the CFTC. We show them next to polls and official data, never instead of them.