The BLS job report dropped this morning, and prediction markets reacted immediately, most notably the Kalshi board tracking the upcoming December Fed decision. Right now, traders are pricing in a 25 bps rate hike as the most likely outcome at Kalshi.
Before we break down the full fallout from the jobs report and what to expect from the Fed's December policy meeting, don't forget to grab our exclusive Kalshi promo code and download the Action Network app to unlock the best trading insights across sports, culture, and politics. Now, let’s dive in.
Kalshi Fed December Rate Hike Odds: Before and After the Jobs Report
All week long, the front-runner in the "Fed Decision in December?" contract was a 25 bps rate hike, topping out at 80% implied probability. However, late Thursday evening saw a noticeable pullback in those implied odds, bottoming out at 64%. Simultaneously, the "Fed Maintains Rate" bracket surged to its peak of nearly 36%.
The release of the jobs report delivered immediate tailwinds to the 25 bps hike contract. In a matter of two hours, it surged from 68% to 78% implied probability, re-establishing a commanding lead over the rest of the board.
Since then, the market has largely stabilized, showing no further movements.
What the October Jobs Report Showed
The October jobs report delivered an upside surprise, with nonfarm payrolls surging by 165,000, crushing consensus expectations of roughly 65,000 and tripling the trailing 12-month monthly average.
The unemployment rate held steady at a tight 4.1%, while upward revisions to August and September added another combined 84,000 jobs to previous tallies.
Hiring gains were paced by professional and business services, health care, and transportation. This broad-based resilience points to a labor market capable of absorbing higher borrowing costs, which cemented the market’s conviction that the Federal Reserve will deliver a 25 bps rate hike at its December meeting.
How the Fed has set up December: The Oct. 28 Hold
The Federal Open Market Committee laid the groundwork for a volatile year-end finale at its October 28 meeting, voting 10–2 to hold the federal funds rate steady at 5.25%–5.50%.
The decision was marked by a lot of internal friction. Two governors formally dissented, casting hawkish votes in favor of an immediate 25 bps hike and citing persistent wage growth alongside sticky core services inflation.
In his post-meeting conference, Chair Jerome Powell underscored that future policy remains strictly data-dependent. Given sticky inflationary pressures and the labor market's ongoing strength, FOMC members noted that today's job report gives them flexibility to proceed with monetary tightening in December without compromising employment.
Next Catalysts: CPI on Nov. 10 and the Dec. 9 Decision
With the labor print in the rearview mirror, traders are turning their full attention to the November 10 Consumer Price Index release as the next major catalyst for market movement. A hot core CPI reading would effectively cement the case for a 25 bps hike, likely pushing odds on the Kalshi board.
On the other hand, any downside surprise in headline inflation could quickly re-price those contracts.
All roads lead directly to the December 9 Fed decision, where Chair Jerome Powell and the Committee must determine whether underlying price pressures warrant another 25 bps tightening cycle before closing out the year.
