Stocks are making only modest moves as Wall Street waits for the Federal Reserve’s interest rate decision and remarks from Fed Chair Kevin Warsh. FINTECH.TV correspondent Mark Payton joins Remy Blaire live from the Cboe trading floor in Chicago to break down the market’s holding pattern and what prediction market traders expect from the Fed today and in December.
Payton says it has been a relatively quiet morning, with investors appearing reluctant to make major moves ahead of the announcement. He notes the VIX has been trading in the 17s for most of the day, slightly lower than yesterday, while the options market gives investors a way to position for a potential swing in stocks. He says the market appears to be in a holding pattern that could change quickly depending on what the Fed says.
On Polymarket, Payton says traders are pricing in about a 95% chance the Fed leaves rates unchanged today, with just a 5% chance of a quarter-point increase. Looking ahead to December, the picture shifts sharply, with traders pricing in about a 78% chance of a quarter-point hike compared with a 20% chance of no change. He says that makes the Fed’s messaging this afternoon just as important as the decision itself, as investors listen for clues about another rate increase before year-end.