Remy Blaire: And it is lunchtime here in New York City and 11 a.m. in Chicago. So let's head on over to FINTECH.TV correspondent Mark Payton, who is live on the ground from the Cboe trading floor.
Hey, Mark. Well, here we are at the noon hour, and we are counting down to the rate decision this afternoon. So get us caught up on the trading action over at Cboe.
Mark Payton: Hey, Remy. We're seeing stocks mostly higher as we approach the middle of the trading day, with the S&P 500 up about four-tenths of a percent.
The VIX remains around the 16.8 level, so volatility continues to be relatively contained, considering we're now just about two hours away from the Fed decision.
The Russell 2000 is also slightly higher. This is one to watch this afternoon.
And perhaps the most interesting move is in the bond market. The 10 year Treasury yield has fallen to around 4.95% after crossing above 5% yesterday. That move lower in yields is giving equities a little breathing room today.
And remember, we also got that stronger consumer number this morning. Retail sales jumped 1.2% in August, beating expectations for a 0.8% increase.
So we have stocks mostly higher, yields easing and the consumer is showing strength. But the big event is still ahead.
Like you mentioned, the Fed decision comes at 1:00 Chicago time, followed by Chair Kevin Warsh at 1:30. And that could give us a very different-looking board here this afternoon.
Remy Blaire: Yeah. And as you mentioned, Mark, we are all waiting not just for the Fed rate decision, but also that press conference and the Summary of Economic Projections.
So we could see a lot of volatility as we head into the close of trade today.
But what activity are you seeing on prediction markets? And give us a sense of what traders are forecasting will happen today.
Mark Payton: Yeah. If we look at the Fed markets on Polymarket, traders are already looking beyond today and trying to figure out what the Fed does at its next meeting in October.
Right now, traders are putting about a 62% probability on the Fed holding rates steady in October, compared with roughly a 38% chance of another quarter-point increase.
And there's been about $2.6 million traded on this October market.
So the message from prediction markets right now is essentially this: a rate hike today may be expected, but traders aren't convinced the Fed will immediately follow it with another one in October.
And that's why what Kevin Warsh says this afternoon could be so important. His comments on inflation, the strength of the economy and what the Fed sees ahead could cause the probabilities to move pretty quickly.
And if we zoom out beyond October, there's another interesting signal. December currently leans back toward another quarter-point increase.
So traders are essentially weighing a path that could look like a hike today, a pause in October and potentially another hike later this year.
So we'll be watching not only what the Fed does today, but how these prediction markets reprice what comes next.
Remy Blaire: Well, Mark, appreciate your time today. A lot of anticipation as we count down to that 2:00 hour. So thank you so much for weighing in.
Mark Payton: Thank you.
