Traders are making record bets on the Fed's next move: Open interest in the August federal funds futures contract, which settles after this week's Fed decision, is up to a record 967,136 contracts. The total number of outstanding contracts has more than doubled since the 2nd week of June. This also surpasses the prior record set in October 2024, when uncertainty around the Fed decision was similarly elevated. This comes as the market is pricing in a ~36% chance of a rate hike today. To put this into perspective, since the end of the 2008 Financial Crisis, the Fed has held 135 FOMC meetings, and only 4 of them, or 3%, have seen the odds of a hike sit between 33% and 66% in the days leading up to the decision, according to Bianco Research. Markets have rarely been this uncertain about a Fed decision.(The Kobeissi Letter)