Federal Reserve policymakers are split on where interest rates should go next, and Kalshi traders are nearly as divided.

Prediction market traders on Kalshi now see a 54% chance that the Fed will raise rates before the end of the year, down from 56% over the past day. The same market gives nearly 80% odds that a hike will happen by 2028 and a 62% chance that it will happen before July 2027.

The odds follow the release of the Fed’s June meeting minutes, which showed policymakers divided over the rate path. The central bank held its target range for the federal funds rate at 3.5% to 3.75% at the June meeting.

The minutes said that many participants believed the appropriate level of the federal funds rate would be within or slightly below the current target range by the end of this year. But many others said the rate should be above the current range, leaving the Fed without a clear consensus on whether the next move should be tighter or easier.

The split comes as the US economy faces renewed inflation pressure and rising geopolitical risk. The Fed’s preferred inflation gauge, the personal consumption expenditures price index, reached an annual rate of 4.1% in May, its highest level since April 2023.

New York Fed President John Williams said Thursday that he does not expect energy prices to remain elevated through the year, even as conflict in the Middle East has added pressure to oil markets. He also said the Fed has not yet completed its analysis ahead of the July 28 and 29 policy meeting.

A separate Kalshi market on rate cuts shows traders leaning even more clearly against easing. The market gives about a 76% chance that the Fed will deliver no cuts this year, little changed after the minutes were released.

Those odds first moved higher on June 16, the first day of Kevin Warsh’s inaugural Fed meeting as chairman, when the probability of no cuts rose from 68% to 77%.

The message from both the Fed and prediction markets is that the rate debate has not settled. Traders are not fully pricing in a hike this year, but they are also not treating cuts as the base case.