How are the Fed interest rates affecting the Mega Millions jackpot?
Recent jackpots, including the $1.337 billion one won in July and the most recent one of $502 million in October.
Estimates for Tuesday night’s Mega Millions jackpot put it at $1.1 billion, the third-highest prize ever and the fourth time in as many years that the payout has been predicted to reach $1 billion.
Recent jackpots, including the $1.337 billion one won in July and the most recent one of $502 million in October, are receiving a little additional juice owing in part to the acts of the Federal Reserve.
The anticipated cash value of the Mega Millions jackpot is calculated by factoring in projected ticket sales and the annuity reward, which is based on the rate of interest paid on 30-year U.S. Treasuries, which is highly correlated with the Federal Funds rate.
How the fed affects the lottery jackpot
The yield on the 30-year Treasury bond reached 3.66% on Monday, up significantly from 2.09% a year earlier, after almost a year of rate hikes by the central bank. Players may thank the federal government for their share of recent massive wins.
Before the victors start thanking Fed head Jerome Powell for the boost, they should note that economic policy is not considered a significant contributor. Ohio Lottery’s Danielle Frizzi-Babb says interest rates don’t impact the reward amount much.
According to the lottery official, the current Mega Millions series started in October because of the record-setting Powerball prize that occurred in the previous autumn. According to her, a huge prize increases foot traffic at stores and may also boost sales of other games.
Consumer interest in lottery games tends to spike during the holidays, which contributed to the current jackpot’s growth.
“We can never foresee when we’re going to have one of these massive jackpot runs,” Frizzi-Babb told FOX Business.
“It’s still a lottery,” she said. Still, a lot depends on chance.
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