The Federal Reserve is almost certain to keep interest rates unchanged in July, according to Polymarket bettors who put a 92.5% probability on a hold. The prediction market's odds shifted after a report showed inflation easing, which also pushed Bitcoin above $64,000 for the first time in weeks.
Inflation data fuels rate-hold expectations
The latest inflation report came in softer than expected, reinforcing the view that the Fed will not raise rates at its July meeting. Polymarket's probability of a hold jumped from around 80% to 92.5% within hours of the release. Traders are now pricing in a potential rate cut later this year.
Bitcoin climbs above $64,000
Bitcoin rose more than 3% on the day, breaking through the $64,000 resistance level. The move was attributed to the easing inflation data, which boosted risk assets across the board. Zcash and Pump.fun were among the top performers, with Zcash gaining 8% and Pump.fun surging 12%.
Zcash and Pump.fun lead the rally
Privacy-focused cryptocurrency Zcash saw renewed interest as investors rotated into assets with unique value propositions. Meanwhile, Pump.fun, a meme coin platform, continued its volatile run, attracting speculative capital. Both tokens outperformed the broader market.
With the Fed expected to hold rates, the focus shifts to the central bank's forward guidance. If inflation continues to ease, a rate cut in September could provide further tailwinds for crypto. However, Polymarket still shows only a 30% chance of a cut in September. The next major catalyst is the Fed's July 29 decision.
