In Five Days, Fed Rate Cut Odds Have Declined Massively
Just five days ago, the likelihood of a quarter-point rate cut was higher, but with fewer than 20 days remaining until the U.S. central bank’s next Federal Open Market Committee (FOMC) meeting, those odds have diminished.
While a rate cut seems unlikely at the May 7 FOMC meeting, there are still 19 days to go, and as Federal Reserve Chair Powell said this week, quoting Ferris Bueller, “Life moves pretty fast.” With Donald Trump as U.S. president, the pace is noticeably swifter. According to CME’s Fedwatch tool five days ago, the probability of a 25‑basis‑point cut by the U.S. Federal Reserve stood at 39.8%.
As of today, April 17, 2025, that likelihood has receded to 9.6%, while the probability of no change rests at 90.4%. This slim prospect for a May rate cut coincides with Trump’s ongoing criticism of Chair Powell and his so-called “late” policy decisions. Trump insists that Powell reduce rates in step with other nations grappling with an escalating trade war environment.
Trump’s statements—including his threat of “termination”—have produced no discernible change in CME’s futures-market bets on the FOMC outcome. Across prediction markets—chiefly Polymarket and Kalshi—expectations for any rate adjustment are slim. On Polymarket, participants ascribe a 90% probability to unchanged rates, with just an 8% likelihood of a quarter-point cut.
On Kalshi, sentiment is similar, with 89% of traders wagering on no change for the May 7 meeting. Ten percent of Kalshi bettors envision a 25‑basis‑point reduction. They also assign a 25% probability to Jerome Powell’s termination this year.
On Polymarket, a similar betting market on Trump dismissing Powell is priced at a 20% chance of that coming to fruition. Although a May rate cut appears improbable, relentless tariff pressures and economic turmoil have seemingly cornered the Fed, which may force it to trim rates as it finds itself between a rock and a hard place.