President Donald Trump publicly urged the Federal Reserve to cut interest rates, but prediction market data shows that bettors remain skeptical the central bank will act in May.

What Happened: According to decentralized forecasting platform Polymarket, 72% of market participants believe the Federal Reserve will hold rates steady at its next meeting on May 7, with only 24% pricing in a 25 basis point cut, and a mere 2.7% expecting a deeper 50+ bps reduction.

In a post on Truth Social on Friday, the former president pressed Fed Chair Jerome Powell to act, writing, "This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates… CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!" Trump cited lower inflation, falling energy prices, and stronger employment as justification for immediate easing.

However, the Fed appears in no rush to move.

Chair Powell has repeatedly signaled caution, emphasizing the need for "greater clarity" before adjusting monetary policy.

"It feels like the Fed does not need to be in a hurry," Powell said on Friday, adding that inflationary impacts from Trump's tariff package could further complicate decision-making.

"The tariffs are bigger than almost all forecasters expected," Powell noted, warning they could raise inflation in the coming quarters with "more persistent effects possible."

Also Read: Bitcoin Has Yet To Price In ‘Very Positive Developments,’ Pantera Capital’s Dan Morehead Says

Wh It Matters: Bettors seem to be factoring in these mixed signals, balancing political pressure with Powell's message that the Fed still sees two cuts in 2025, but only once the economic outlook becomes more predictable.

Polymarket's trading data shows a sharp drop in the odds of a rate cut since late March, even as Trump's messaging intensifies.

The former president's comments reflect a broader push for looser monetary policy ahead of the election season. But markets are currently pricing in caution, not capitulation.

Powell said that a year from now, uncertainty should be much lower as impact of Trump policies becomes clearer and that the Fed will wait for greater clarity before further adjustments.

Meanwhile, in a note sent to Benzinga, David Hernandez, Crypto Investment Specialist at 21Shares said Powell's comments follow right after Trump's call for rate cuts, highlighting the growing tension between political pressure and the Fed's cautious approach.

The Fed's caution may come at a cost though, as holding rates too high for too long could cause unnecessary economic stress, which could compound on heightened market volatility.

"With the next FOMC meeting still a month away, the possibility of an emergency rate cut cannot be completely ruled out. Equity markets might need this breather, but from the looks of it, Bitcoin may be a net beneficiary,” he said.

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