The Federal Reserve logo is visible on the William McChesney Martin Jr. Building on December 9, 2025 in Washington, DC.
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Chances that the Federal Reserve increases interest rates this year shot up from 25.3% to 52% in the last week on prediction markets platform Kalshi.
Those odds come after Friday’s report from the Bureau of Labor Statistics revealed nonfarm payrolls hit 172,000, comfortably exceeding Dow Jones expectations of 80,000. A Fed hike before July 2027 also jumped from 54% to 65% in the past week on Kalshi.
Fed rates increasing mean the Federal Reserve raises interest rates to stop the economy from overheating. With a higher-than-expected job report and the annual core inflation rate hitting 3.3% in April, economists see a fed hike approaching.
“I think there actually could be one this year, and for good reason. Inflation is pretty sticky,” said former Federal Reserve Vice Chairman Roger Ferguson to CNBC’s “Squawk Box.”
The CME’s Fedwatch tool recorded a 50% chance of a higher rate this year. For other economists, the move is for the Fed to not do anything, for now.
“Payroll Blowout! We’ve gained more and more confidence in the last prints that the Fed doesn’t have to be worried about the labor market,” Lindsay Rosner, Goldman Sachs Asset Management head of multi-sector fixed-income investing, wrote in a note. “Laser focused on inflation and it will all come down to the duration of this War to determine the Fed’s next move. For now, the move is to not move: HOLD.”
Sectors like leisure and hospitality recorded 70,000 jobs, the highest out of any sector. Meanwhile local government added 55,000 jobs, social assistance added 12,000 and health care brought in 35,000, roughly in line with its average.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
