Continued Betting on Interest Rate Cuts! Polymarket Bets Over $1.48 Million on Interest Rate Cut in September, Lawmakers Call for Ban on Election Gambling

According to data from the well-known blockchain prediction platform Polymarket, users have wagered nearly $1.48 million on the bet that the Federal Reserve will cut interest rates before September this year. However, several Democratic lawmakers are taking action to urge the Commodity Futures Trading Commission (CFTC) to ban election gambling activities.

Polymarket betting exceeds $1.48 million

With the U.S. election bets still active, Polymarket users have shifted their focus to the Federal Reserve, with over $1.48 million in bets placed on the specific timing of the institution's interest rate cuts.

During the market collapse, Polymarket users initiated bets on "predicting the Fed's interest rate cut in September 2024," with the betting volume now reaching $1.48 million.

It is reported that the probability of the Fed cutting rates by more than 50 basis points is 56%, while the probability of a 25 basis point cut is 40%, with bets of $728,000 and $317,000 placed respectively.

Currently, according to the CME FedWatch tool, traders estimate an 83.5% probability of a 50 basis point rate cut and a 16.5% probability of a 25 basis point cut in September. With the current federal funds rate ranging between 5.25% and 5.5%, a timely rate cut could help avoid a potential economic recession crisis.

U.S. Election Boosts Polymarket Activity

Benefiting from the U.S. election, Polymarket achieved record-high trading volume in July, reaching $387 million, with over 44,000 cumulative users.

It is noted that predictions on U.S. political events have driven the cumulative trading volume of the prediction market, which has now surpassed $1.137 billion.

Once Every Four Years! Polymarket Prediction Market Surpasses $1 Billion in Trading Volume Amid U.S. Election Frenzy

Democratic Lawmakers Urge CFTC to Ban Election Gambling

With the rapid growth of prediction platforms, eight Democratic lawmakers including Elizabeth Warren have urged the CFTC to ban gambling on the 2024 U.S. presidential election.

In a letter to CFTC Chairman Rostin Benham, they pointed out that the gambling market could disrupt elections, undermine the sanctity of democracy, and further erode public trust in the electoral process:

Political gambling changes the motivation behind every vote, replacing political beliefs with probability calculations. We urge you to take action promptly to prevent the commodification of U.S. elections.

However, crypto venture Paradigm had previously indicated that the existence of prediction markets could help startups hedge risks and have positive externalities on the public:

For example, if Congress is about to pass a bill that would affect U.S. crypto startups and the bill is directly influenced by a specific party in Congress. Entrepreneurs can hedge risks by purchasing a prediction contract related to party control within Congress, allowing them to avoid potential risks based on political changes.

They further added, "When users participate in prediction markets, those who do not participate in the market can also obtain valuable real-time information on election positions, which may be more efficient and accurate in assessing current conditions and future outcomes than traditional polls."

Crypto Venture Paradigm Supports Prediction Market Kalshi: Prediction Platform Can Help Companies Hedge Risks