Resolution criteria
This market will resolve based on the Federal Reserve's interest rate decision announced at the conclusion of the Federal Open Market Committee (FOMC) meeting scheduled for September 16–17, 2025. The possible outcomes are:
Increase: The FOMC raises the target range for the federal funds rate.
No change: The FOMC maintains the current target range for the federal funds rate.
25 bps decrease: The FOMC lowers the target range by 25 basis points (0.25 percentage points).
50+ bps decrease: The FOMC lowers the target range by 50 or more basis points (0.50 percentage points or more).
The official FOMC statement, typically released at 2:00 p.m. ET on the final day of the meeting, will serve as the primary source for resolution. The statement can be found on the Federal Reserve's website: (federalreserve.gov)
Background
As of August 1, 2025, the federal funds rate target range is 4.25% to 4.50%, unchanged since December 2024. Recent FOMC meetings have maintained this rate, with the most recent decision on July 30, 2025, resulting in a 9–2 vote to hold rates steady. Dissenting votes from Governors Michelle Bowman and Christopher Waller favored a rate cut, indicating internal debate within the committee. (reuters.com)
Economic indicators present a mixed picture:
Inflation: The Personal Consumption Expenditures (PCE) index, the Fed's preferred inflation measure, showed a slight increase in May 2025, suggesting inflation remains above the 2% target. (ainvest.com)
Labor Market: While the labor market remains resilient, recent data indicates a slowdown in job gains, with only 73,000 jobs added in July 2025. (apnews.com)
Economic Growth: Gross Domestic Product (GDP) growth has moderated, with Q2 2025 GDP exceeding forecasts at 3%, driven by decreased imports, but consumer spending has slowed slightly. (kiplinger.com)
Additionally, President Donald Trump has publicly pressured the Federal Reserve to lower interest rates, criticizing Chair Jerome Powell and advocating for rate cuts to stimulate economic growth. (ft.com)
Considerations
Market expectations for a September rate cut have fluctuated. As of late July 2025, futures markets indicated a 50% probability of a rate cut in September, down from 65% earlier in the month. (reuters.com) Analysts are divided, with some forecasting rate cuts later in 2025, while others anticipate the Fed will maintain current rates amid economic uncertainties. (kiplinger.com)
Traders should monitor upcoming economic data releases, including inflation reports and labor market statistics, as well as statements from Federal Reserve officials, to gauge the likelihood of a rate change in September.