Will the Fed decide differently in the next three decisions (Jun–Jul–Sep)?
Alpha Opportunity
Alpha Thesis
Our AI estimates a true probability of 12.0% vs the market's 44.5%, identifying a 32.5% edge on the NO side. Historically, the Fed has shown a pattern of maintaining rates over consecutive meetings unless significant economic changes occur. The base rate for a change in all three meetings is low, as the Fed typically adjusts rates incrementally. Current economic indicators such as inflation and unemployment are stable, but there is uncertainty due to global economic conditions. Recent Fed statements suggest a cautious approach, with potential for rate changes if economic conditions shift.
📐Key Metrics
Key Findings
- Historical Fed Rate Decision Patterns — Historically, the Fed has shown a pattern of maintaining rates over consecutive meetings unless significant economic changes occur. The base rate for a change in all three meetings is low, as the Fed typically adjusts rates incrementally.
- Current Economic Indicators and Fed Statements — Current economic indicators such as inflation and unemployment are stable, but there is uncertainty due to global economic conditions. Recent Fed statements suggest a cautious approach, with potential for rate changes if economic conditions shift.
- Resolution Criteria — The market will resolve to YES if the combination of decisions made in the June, July, and September meetings is different from the previous decisions. It will resolve to NO if the combination remains the same. Any rate hike will result in a resolution to 'Other'.
- 10 Sources Analyzed — Including Federal Reserve issues FOMC statement, The Fed - Meeting calendars and information - Federal Reserve, Implementation Note issued July 26, 2023 - Federal Reserve Board
Full Research Report
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Alpha Quality Factors
Criteria that determine how exploitable this mispricing is
Human Bias Detected
Cognitive biases creating this alpha opportunity
The market overweights vivid, recent events, making this outcome feel more likely than it actually is.
The crowd may lack specialized knowledge that narrows the true probability range.