**Market Bets on Fed Rate Decision: What the Latest Odds Tell Us About Employment Expectations**

Traders are closely watching the Federal Reserve's monetary policy meeting minutes, set to be released tomorrow (Wednesday) at 3 AM. The key focus remains whether the central bank will continue easing cycles or hold steady. Market sentiment around a potential January rate cut—particularly a 25 basis point reduction—continues to shift, offering insights into how participants view the probability of continued employment conditions.

**CME Fed Watch Signals Growing Conviction**

The CME "Fed Watch" tool shows climbing odds for a 25 basis point cut by January, now standing at 18.3%, up from 15.5% just last week. This upward momentum reflects market participants' evolving assessment of economic data and labor market dynamics. As traders reassess the probability of sustained employment trends, betting markets have incrementally shifted toward more aggressive rate-cut expectations.

**Polymarket's Contrasting View**

Meanwhile, the prediction market Polymarket offers a more cautious take, with traders pricing in just 13% odds for the same 25 basis point cut in January. This divergence between CME futures and decentralized prediction markets highlights different risk appetites and information processing speeds between institutional and retail participants.

**What's Driving the Shift?**

The week-over-week increase in Fed Watch probabilities suggests market participants are recalibrating their views based on incoming economic signals. While employment data remains a critical factor in the Fed's decision-making framework, the growing probability of rate cuts indicates traders believe the labor market may have cooled enough to warrant policy relief. Tomorrow's meeting minutes could either reinforce or challenge these expectations, potentially triggering significant market moves across equities, crypto, and fixed income assets.