The market predicts an 84.5% chance of the Fed holding interest rates steady in January.

2026-01-21 14:14:24

Abstract generation in progress

According to CME’s FedWatch indicator, the market assesses an 84.5% probability that the Federal Reserve will hold interest rates steady in January. This compares to a 15.5% chance of a rate cut, reflecting the market’s cautious expectations regarding rate decisions.

CME FedWatch Market Outlook

Based on official CME data cited by PANews on December 26, the probability of the Fed cutting interest rates by 25 basis points in January is only 15.5%. Conversely, the probability of maintaining the current rate is overwhelmingly high at 84.5%. These figures suggest that market participants expect the Fed’s tightening stance to continue for the foreseeable future.

Future Quarterly Interest Rate Policy Directions

From a longer-term perspective, looking at the cumulative rate cut scenarios through March next year, the market reflects various possibilities. The highest probability is for rates to remain unchanged at 51.8%, with a 42.2% chance of a cumulative 25bp cut. The probability of a cut of more than 50bp is low at 6.0%. This indicates that the market expects the Fed to maintain a relatively cautious monetary policy stance over the next three months.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.