Polymarket’s biggest trader bets $15K on the Fed cutting rates more than expected next week.
- The trader could win over $226,000 if the Fed cuts rates by 50 basis points
- Most experts expect just a 25 basis point cut, but odds of a bigger move are rising
- Key job and inflation data this week could affect the final decision
High-Stakes Bet on Interest Rate Cut
A top trader known as JustWakingUp on Polymarket, a decentralized betting site, is taking a bold position. This trader has placed a $15,000 bet that the Federal Reserve will lower interest rates by 50 basis points, or 0.50%, next week.
If the Fed does cut rates that much, the trader stands to make around $226,000. As of now, the position has already gained 3% in value.
Who Is This Trader?
JustWakingUp is not new to Polymarket. According to the group Polymarket Whales, this trader has made nearly $400 million in trades and earned over $2 million in profit. They are the platform’s most active user.
What the Market Thinks
While this bet is risky, it’s not completely out of the question. Most of the market still expects the Fed to make a smaller, 25 basis point cut. The CME FedWatch Tool shows a 91% chance of that smaller move.
However, signs are shifting. After a weak jobs report in August, the chance of a 50 basis point cut rose to almost 10%.
Why Expectations Are Changing
The U.S. Bureau of Labor Statistics recently reported that the country added 911,000 fewer jobs over the past year than first thought. That’s the biggest drop in recent history and could push the Fed to act faster to support the economy.
Major financial players like BlackRock and Standard Chartered have also suggested a 50 bps cut might be needed.
What’s Next?
This week’s economic data could play a big role. The market is watching two reports: the Producer Price Index on Wednesday and the Consumer Price Index on Thursday. If inflation is softer than expected, chances for a big rate cut may increase.
That could impact not just interest rates but also prices for bitcoin and stocks, which tend to rise when the Fed cuts rates.
Source: coindesk.com
