Tuesday, December 30, 2025 1:57 PM EST
Former Fed Governor Kevin Warsh has been making a comeback in his probabilities of being nominated as the central bank’s leader in recent days, rising to as high as 38% yesterday from as low as 24% last week. Warsh’s gain has trimmed National Economic Council Director Kevin Hassett’s lead significantly with his chances now at 43%, while current central banking official Christopher Waller and Treasury Secretary Scott Bessent are at 9% and 2%, respectively. President Trump said yesterday that the announcement will arrive sometime next month while refraining from stating whether he favors either of the top two contenders. There are approximately 70k contracts open tied to the selection.
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Participants Gearing Up for January Fed Decision
Yesterday’s trading action on ForecastEx featured building engagement in the Fed’s interest rate decision next month, as participants are increasingly sure that the central bank will pause with an 89% degree of certainty. Earlier in December, the chances of an unchanged benchmark in January were a lot lower at 64%.
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Singapore SORA Combo Trade Opportunity
The Singapore Overnight Rate Average (SORA) has ran between 1% and 1.5% for 17 consecutive days, averaging 1.16% for the month of December amidst a 7-day mean of 1.29%. Against this backdrop the “Yes/No” combo at 1% and 1.5% appears undervalued to me at an overall cost of $1.74, featuring a maximum total loss of $0.89.
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“Yes” at 2.2% Looks Modestly Undervalued
The Dallas Fed’s Weekly Economic Index has exceeded 2.2% for four consecutive weeks and is poised to come in north of that level again tomorrow in my opinion. Activity has been firm lately and the “Yes” at $0.65 isn’t hugely undervalued, but still offers a decent opportunity since the price should be closer to $0.75.
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Claims Expected to Come in Near 220K
Wall Street expects initial unemployment claims to come in 220k tomorrow and our participants are right near there. Indeed, there’s an approximate 59% chance of a number arriving north of that level and a 39% probability of a figure coming in at 220k or under.
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Source for images: ForecastEx
Note: Prices are highest bids as of the morning of Dec. 30, 2025.
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Disclosure: ForecastEx
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
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