Open interest in federal funds futures has reached an all-time high ahead of one of the most uncertain Federal Reserve meetings in years.

According to CME data, outstanding contracts tied to tomorrow’s policy decision rose to 967,136, exceeding the previous record as markets continued to assign about a 30% chance of a surprise interest rate hike.

The split expectations come as markets assess mixed economic signals and the leadership style of Fed Chair Kevin Warsh, who has emphasized flexibility rather than signaling policy decisions in advance.

In a recent note, The Kobeissi Letter expects the central bank to keep interest rates unchanged on Wednesday despite unusually divided market expectations heading into the decision.

According to the firm, interest rate futures currently imply about a 30% probability of a rate hike and a 70% chance that the Fed holds rates steady, a sharp contrast to nearly every meeting since March 2020, when markets entered decision day with roughly 99% consensus.

While acknowledging the elevated uncertainty, the firm said several factors would favor another pause.

These include President Donald Trump’s previous remarks that his preferred Fed chair would be willing to cut rates, expectations that inflation linked to the Iran conflict will be viewed as temporary, signs of labor market weakness, and the ongoing burden of elevated borrowing costs on US households.