With less than two weeks until the June FOMC meeting, market expectations for the Federal Reserve’s rate trajectory have shifted dramatically. A June rate cut has been almost entirely ruled out by market participants.
According to the latest data from Gate’s prediction market, the probability that the Fed will keep rates unchanged in June stands at 99%, while the likelihood of a 25-basis-point rate cut is just 1%. This data clearly shows that nearly all prediction market participants believe the Fed will take no easing action in June.
This assessment aligns closely with mainstream market tools. CME FedWatch’s latest data indicates a 97% probability that the Fed will hold rates steady in June, and only a 3% chance of a 25-basis-point cut. Looking across all of 2026, CME data further shows a 40.9% probability that rates remain unchanged throughout the year, while the chance of a 25-basis-point hike has risen to 41.6%.
Comparing cross-market data, Gate’s prediction market’s 99% probability is slightly higher than CME’s 97%—a negligible difference, with both sending the same signal: Professional market participants see the likelihood of a June rate cut as virtually zero.
Diverging Institutional Views: Goldman Sachs Abandons Rate Cut Forecast, Citi Remains the Lone Dove
Wall Street institutions are now sharply divided on the Fed’s policy outlook for the remainder of the year.
Goldman Sachs officially "capitulated" on June 6, abandoning its 2026 rate cut forecast after strong May nonfarm payroll data. The bank pushed its model’s last two projected rate cuts out to June and December 2027. Chief US economist David Mericle noted that tariffs, high oil prices driven by Middle East tensions, and AI demand will keep core PCE inflation above 3% in 2026, leaving the Fed with no urgency to cut rates in the near term. Meanwhile, Goldman raised its probability of a Fed rate hike in 2026 from 10% to 20%.
Citi stands out as Wall Street’s most resolute "dove." The bank still expects three rate cuts this year, forecasting the Fed will lower rates by 25 basis points in September, October, and December. Chief US economist Andrew Hollenhorst believes the labor market will gradually cool over the next three months, prompting markets to reprice rate cut expectations. Citi accurately predicted the Fed’s three rate cuts last year, and its forecasting track record continues to draw market attention.
Other institutions are even more hawkish. JPMorgan has been forecasting a Fed rate hike in 2027 since January. BNP Paribas turned more hawkish after the latest jobs data, now expecting the Fed to raise rates three times in succession starting December 2026.
Macro Data Limits Rate Cut Room: Both Jobs and Inflation "Not Cooperating"
The near-zero probability of a June rate cut is underpinned by US macro data consistently beating expectations.
On the jobs front, US nonfarm payrolls rose by 172,000 in May—almost double the expected 88,000 and well above April’s 115,000. The unemployment rate held steady at 4.3%. The past three months saw the largest job gains in over two years. Cleveland Fed President Hammack commented after the jobs report that the labor market is "roughly balanced," and the case for a rate hike is now surfacing.
On inflation, US CPI for April climbed to 3.8% year-over-year, the highest since May 2023. Markets widely expect May’s CPI to rise further to 4.2%, with core CPI projected at 2.9%. Energy prices remain the main driver—Middle East conflicts have pushed energy commodity prices up 29.2% year-over-year. The May CPI report, set for release Wednesday, will be the last major data point before the June FOMC meeting and will further clarify whether inflation is still climbing.
Goldman Sachs projects that tariffs, high oil prices, and AI-driven demand will keep core PCE inflation above 3% for all of 2026—well above the Fed’s 2% target. Against this backdrop, not only is there no room for rate cuts, but some institutions are now factoring in rate hikes as their base scenario.
New Chair Warsh Faces Policy Shift Pressure
The June 16–17 FOMC meeting marks the first monetary policy decision for newly appointed Fed Chair Kevin Warsh, drawing intense market scrutiny.
Warsh has repeatedly signaled his intent to overhaul the Fed. Markets are watching closely to see if he will continue publishing the quarterly Summary of Economic Projections (SEP) and the dot plot—he has previously opposed releasing the dot plot and even suggested scrapping forward guidance. Morgan Stanley’s latest report warns that the June FOMC meeting is the most significant and underpriced risk event in the current FX market, and Warsh’s debut may disrupt the low-volatility environment that has dominated markets this year.
From a policy perspective, Morgan Stanley notes Warsh prefers less forward guidance, favoring a more market-driven approach to economic and policy expectations. UniCredit Bank of Italy also points out that under Warsh, the Fed may become "less committed and harder to predict."
Gate Prediction Market’s Unique Reference Value
Gate’s prediction market data shows just a 1% probability of a June rate cut—closely aligned with CME FedWatch signals—offering market participants a cross-verification perspective from a crypto-native tool.
Prediction markets are typically driven by participants with deep knowledge and real risk exposure. Unlike traditional rate futures pricing, prediction markets reflect concentrated views on specific events through direct betting, giving investors an alternative dimension for decision-making. For the Fed’s June decision, cross-market data has fully converged.
Potential Impact on Crypto Asset Holders
For participants in the crypto market, the Fed’s rate trajectory impacts two key areas.
First, the June "hold" decision is fully priced in, so the risk of a short-term policy shock is low. However, if Wednesday’s CPI report comes in well above expectations, rate hike forecasts could intensify, putting pressure on risk asset prices. Recently, the US 10-year Treasury yield broke above 4.5%, and all three major US stock indexes declined, with the Nasdaq dropping 4.7% in a single week.
Second, changes in forward guidance warrant close attention. While the probability of a June rate cut is near zero, it’s more important to watch for shifts in language in the FOMC statement and the dot plot (if published as usual). If Warsh unexpectedly delivers a strong hawkish signal, further suppressing rate cut expectations for the year, the crypto market could face a phase of capital outflows.
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Conclusion
Drawing on the latest insights from Gate Prediction Market, CME FedWatch, and leading Wall Street institutions:
- A June rate cut is essentially off the table. Gate Prediction Market shows just a 1% probability, CME data puts it at about 3%, and only Citi still expects a cut.
- Policy bias has shifted to "higher for longer." Goldman Sachs has abandoned its rate cut forecast for this year, and several institutions are now discussing the possibility of a hike.
- Macro data is the main constraint. May’s nonfarm payrolls far exceeded expectations, April CPI has risen to 3.8%, May CPI is projected to climb to 4.2%, and inflation remains well above the Fed’s 2% target.
- The key focus for the June FOMC meeting is Warsh’s policy signals. Whether the new chair changes the dot plot release tradition or signals a shift in forward guidance is a more important variable than the rate decision itself.
This article is for informational purposes only and does not constitute investment advice. Crypto asset prices are highly volatile; investors should carefully assess their own risk tolerance and pay close attention to the June 16–17 FOMC meeting and this week’s upcoming CPI data for potential market impacts.
