Rumpus Daily, 6 Nov 2026: Traders trim the odds of a December Fed hike

In this episode: Traders trim the odds of a December Fed hike. Two stories this morning. First: traders are trimming the odds of a December Fed rate rise after the Republicans' midterm loss sent oil prices lower. The hike contract has fallen eighteen points from its peak.

Transcript

Opening

Sheema: Good morning and welcome to The Rumpus Daily. I'm Sheema Sharti.

Neil: And I'm Neil Matthews. Every weekday we bring you the signals from the world's prediction markets. Today is Friday, November sixth.

Sheema: Two stories this morning. First: traders are trimming the odds of a December Fed rate rise after the Republicans' midterm loss sent oil prices lower. The hike contract has fallen eighteen points from its peak. Second: the race to be Israel's prime minister repriced sharply overnight after an ultra-Orthodox party withdrew support from Benjamin Netanyahu, pushing Gadi Eisenkot to the front.

Traders trim the odds of a December Fed hike

Sheema: Traders trim the odds of a December Fed hike. Neil, where does the contract sit?

Neil: Polymarket's contract on a quarter-point rise trades at sixty-six per cent. It settles on December ninth. That's down twelve points in a day, and down eighteen from its peak of eighty-three per cent on November fourth. Kalshi prices the same question at sixty-five per cent, so the two books agree on about two in three for a hike.

Sheema: And the trigger was oil. Forexlive reported oil tumbling on bets that the Republican midterm loss shortens the Iran war. Cheaper oil means less inflationary pressure, and less pressure gives the Fed cover to hold.

Neil: Goldman Sachs is calling a December cut. The market gives that only one per cent, though. So the question is why anyone sells the hike at eighty-three.

Sheema: I'd push back on the whole move. The Bank of England voted nine to nothing to raise rates the same day, into the same oil-driven inflation. If London tightened unanimously, why does Washington hold?

Neil: That's the best case for the hike, and our reading is that the war-exit bet outweighs it. Oil fell on the Republican loss, and Goldman is now forecasting easing. Citi still flags escalation risk with Iran, and dearer oil feeds straight into inflation.

Sheema: The hold contract sits at thirty-two per cent, so our call is that the hike is overpriced and the Fed holds on December ninth. We're wrong if the Polymarket hike contract climbs back above seventy-five per cent by November twentieth, meaning October inflation data or Fed speakers have turned against a pause.

Next, the race to be Israel's prime minister, where Gadi Eisenkot now leads.

Sheema: Next, the race to be Israel's prime minister, where Gadi Eisenkot now leads.

Neil: Eisenkot, a former Israeli military chief, trades at sixty-three per cent on Polymarket to become Israel's next prime minister. That's up six and a half points overnight on about two hundred and seventy thousand dollars. Kalshi has him at fifty-eight per cent. Netanyahu fell nearly five points to twenty-four per cent.

Sheema: The move followed The Hindu's reports that an ultra-Orthodox party withdrew support from Netanyahu. Does the gap between fifty-eight and sixty-three come from the deadlock scenario, where no one forms a government and Netanyahu stays on as caretaker?

Neil: That's the strongest case against Eisenkot, and The New Arab set it out. Polymarket moved further and on more than three times Kalshi's money, so the house reads fifty-eight as too low.

Sheema: What settles it?

Neil: If Israel's president hands the mandate to Netanyahu within two weeks, or the ultra-Orthodox party returns to him, we're wrong. Until then, our view is that Eisenkot becomes prime minister and Kalshi's fifty-eight per cent is too low.

Close

Sheema: Neil, thanks very much.

Neil: Thanks, Sheema.

Sheema: That's The Rumpus Daily for Friday, November sixth. We'll see you on Monday.