Will the Federal Reserve cut interest rates in June? Gate's prediction market funds tell you the answer

Less than two weeks remain before the June FOMC meeting, and market expectations for the Federal Reserve’s interest-rate path have undergone a dramatic shift. A June rate cut has essentially been fully ruled out by market funds.

According to the latest data from Gate’s forecast market, market funds are pricing in a 99% probability that the Fed will hold the current interest rate in June, while the probability of pricing in a 25 basis point cut is only 1%. This data clearly shows that market participants are almost unanimous in believing the Fed will take no easing action in June.

This assessment is highly consistent with how mainstream market tools are pricing it. Based on the latest data from the CME FedWatch tool, the market expects the probability of the Fed holding rates steady in June to be about 97%, while the probability of a 25 basis point cut is only 3%. Looking across the entire 2026 year, CME data further shows that the probability of the Fed keeping rates unchanged throughout the year is about 40.9%, while the probability of a 25 basis point hike has reached 41.6%.

From a cross-market data comparison, Gate’s forecast of 99% is slightly higher than CME’s 97%—the difference between the two figures is extremely small, and the signal direction is completely aligned: In the eyes of professional market funds, the likelihood of a June rate cut is basically zero.

A Split Among Institutional Views: Goldman Sachs Gives Up on Rate Cuts This Year, Citigroup Stands as the Sole Holdout

Wall Street institutions’ views on the Fed’s policy direction this year have become clearly divided.

Goldman Sachs officially “surrendered” on June 6. After the release of the strong May non-farm payroll employment data, it completely abandoned expectations for rate cuts in 2026, and pushed back the last two rate-cut timing points in its model substantially to June 2027 and December 2027. Goldman Sachs Chief U.S. Economist David Mericle noted that tariffs, high oil prices triggered by the U.S.-China conflict, and triple pressure from AI demand will keep 2026 core PCE inflation above 3%, leaving the Fed with no urgency to cut rates in the near term. At the same time, Goldman Sachs raised the probability of a Fed rate hike in 2026 from 10% to 20%.

Citigroup, meanwhile, has become Wall Street’s most steadfast “dove.” The bank still maintains its expectation of three rate cuts within the year, forecasting that the Fed will cut 25 basis points in September, October, and December. Citigroup Chief U.S. Economist Andrew Hollenhorst believes that in the coming three months the labor market will gradually cool, which will drive the market to reprice expectations for rate cuts. Citigroup accurately predicted the Fed’s three rate cuts last year, and its forecasting record keeps the bank’s view in focus for the market.

Other institutions are even more hawkish. JPMorgan has been predicting since January of this year that the Fed will hike rates in 2027. After the latest employment data release, BNP Paribas shifted further hawkish, expecting the Fed to conduct three consecutive rate hikes starting from December 2026.

Macro Data Clamps Down on Rate-Cut Space: Jobs and Inflation Are “Not Cooperating” Together

Behind the near-zero expectation for a June rate cut is the continued outperformance, against expectations, of U.S. macro data.

On the employment front: In May, the U.S. added 172,000 non-farm payroll jobs, nearly double the market expectation of 88,000, and far above April’s 115,000. The unemployment rate remains steady at 4.3%. The number of new jobs added over the past three months in the U.S. has recorded the largest increase in more than two years. After the employment data release, Cleveland Fed President Hammack said the labor market is “roughly in balance,” and a narrative that it will soon be suitable for rate hikes has emerged.

On inflation: In April, the U.S. CPI rose to 3.8% year over year, the highest since May 2023. The market widely expects May’s CPI to rise further to 4.2%, and core CPI to rise to 2.9%. Energy prices remain a major driver of inflation—conflicts in the Middle East have caused energy commodity prices to surge 29.2% year over year. The May CPI data to be released on Wednesday will be the last major piece of heavyweight data before the June FOMC meeting, and its results will further confirm whether inflation is still continuing to climb.

Goldman Sachs expects that, due to a combination of the transmission effect of tariffs, the impact of high oil prices, and AI demand, full-year 2026 core PCE inflation will remain above 3%, far higher than the Fed’s 2% target. Against this backdrop, not only is there no room for the Fed to cut rates—some institutions have even started to incorporate rate hikes into their baseline scenario.

Incoming Chair Warsh Faces Pressure for a Policy Turn

The FOMC meeting on June 16–17 will be the first monetary policy decision meeting after new Fed Chair Kevin Warsh takes office, and it is drawing significant market attention.

Even at the start of his tenure, Warsh has repeatedly stated that he is prepared to make major reforms to the Fed. The market is especially focused on whether he will continue the tradition of releasing the quarterly Economic Projections Summary (SEP) and the dot plot—he previously did not support publishing the dot plot, and even believed that forward guidance should be scrapped. In its latest report, Morgan Stanley warned that the June FOMC meeting is viewed as the most significant and insufficiently priced risk event in the current FX market, and Warsh’s first time chairing could break the low-volatility environment that has dominated the market this year.

On policy orientation, Morgan Stanley noted that Warsh tends to reduce forward-looking guidance and is more willing to let the market judge the economic and policy path on its own. UniCredit also pointed out in its report that under Warsh’s leadership, the Fed will become “harder to commit to and harder to predict.”

The Unique Reference Value of Gate’s Forecast Market

Gate’s forecast market data shows that the probability of market funds betting on a June rate cut is only 1%—this figure is highly consistent with the signal direction of the CME FedWatch tool, providing a cross-validation perspective from a native crypto instrument.

Forecast markets are typically driven by participants who have deep knowledge and substantial exposure to real risk. Compared with how traditional financial market interest-rate futures are priced, forecast markets can reflect market consensus on specific events through direct betting behavior, offering investors a decision-making reference from a different dimension. For the Fed’s June decision, cross-market data has converged completely.

Potential Impact on Crypto Asset Holders

For participants in the cryptocurrency market, the impact of the Fed’s rate direction mainly shows up in two dimensions.

First, a “hold” in June has already been fully priced in by the market, making the likelihood of near-term policy shocks relatively low. However, if the CPI data to be released on Wednesday far exceeds expectations, expectations for rate hikes may heat up further, creating pressure on the prices of risk assets. Recently, the U.S. 10-year Treasury yield has already broken above 4.5%, and major U.S. stock indexes have come under pressure and fallen; the Nasdaq’s weekly decline reached 4.7%.

Second, be alert to changes in forward guidance. Although the probability of a June rate cut is approaching zero, what is even more worth watching is whether wording in the statement after the FOMC meeting changes and whether the dot plot is issued (if it is released as usual). If Warsh unexpectedly releases hawkish signals, or further suppresses expectations for rate cuts within the year, the crypto market could face phase-related pressure from capital flowing back out of the market.

Green Field Prophet: Gate’s Forecast Market World Cup Event Opens for a Limited Time

Alongside the focus on the rate decision, Gate’s forecast market (Gate Polymarket) has rolled out the 2026 World Football Festival “Green Field Prophet” limited-time event. The total prize pool exceeds 500,000 USDT, and the event runs from June 4, 2026 to July 21. Users can sign up to receive prediction tickets for free. Completing tasks such as spot, contracts, CFDs, and VIP upgrades will earn more prediction-market experience tickets and prediction tickets, which can be used to participate in predicting football matches. The top 100 on the prediction points leaderboard can share 30,000 USDT and limited-edition jersey gift boxes, and there is a separate 5,000 USDT prize pool for the champion’s prediction. VIP users can also enjoy exclusive sign-up rewards and jersey gift boxes. Log in to Gate now to sign up and enjoy the World Cup prediction fun on the forecast market.

Summary

Taking into account Gate’s forecast market, the CME FedWatch tool, and the latest assessments from mainstream Wall Street institutions:

• A June rate cut is basically out of the question. Gate’s forecast market shows the probability of a rate cut is only 1%; CME data shows it is about 3%; on the institutional side, only Citigroup still retains expectations for rate cuts.
• The policy balance has tilted toward “higher for longer.” Goldman Sachs has completely given up expectations for rate cuts this year, and multiple institutions have started discussing the possibility of rate hikes.
• Macro data is the biggest constraint. May non-farm payrolls came in far above expectations; April CPI rose to 3.8%; May CPI is expected to move further up to 4.2%. Inflation is still noticeably above the Fed’s 2% target.
• The highlight of the June FOMC meeting is the policy signals from Warsh. Whether the new chair’s first meeting changes the convention for releasing the dot plot and whether it will release forward-guidance signals is a variable worth watching even more than the rate decision itself.

This article is for reference only and does not constitute investment advice. Crypto asset prices are highly volatile; investors should fully assess their own risk tolerance and watch for market volatility driven by the June 16–17 FOMC meeting and the CPI data expected to be released this week.