CME assesses the likelihood of the Fed's actions: April becomes a key month

Whale_Whisperer · 2026-02-22T07:09:22+00:00

Recent CME data shows contrasting market expectations for the Federal Reserve's actions. In March, probabilities indicate low expectations for rate cuts, while April presents a potential shift with increased confidence in rate reductions, peaking in June with over 50% likelihood for a cut.

Whale_Whisperer

2026-02-22 07:09:22

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Data published by CME in early February paint a contrasting picture of financial market expectations regarding the Federal Reserve’s actions in the coming months. The probability estimates developed by Jin10 analysts show how investor confidence shifts as April approaches and beyond.

March: Conservative Market Expectations

In March, the market maintains quite cautious forecasts. The probability that the Fed will cut rates by 25 basis points is only 22.7%. The overwhelming majority of market participants—77.3%—expect interest rates to remain unchanged. This indicates that decisive steps from the central bank in March are unlikely.

April – A Turning Point in Expectations

The situation changes significantly when moving into April. Here, the probability of a cumulative 25 basis point cut rises to 36.2%, nearly one and a half times higher than in March. At the same time, expectations for more drastic measures increase: the probability of a double cut (50 basis points) reaches 5.6%. Meanwhile, the expectation of holding rates steady decreases to 58.1%, indicating growing anticipation of possible changes in monetary policy specifically in April.

June: Growing Confidence in Rate Cuts

By June, the probability outlook shifts even more in favor of rate cuts. The chance of a cumulative 25 basis point reduction surpasses other scenarios, reaching 50.2%. This suggests that the market is increasingly confident in the need for monetary easing as the year progresses.

Thus, CME data indicate a gradual shift in market expectations: while March remains uncertain, April is positioned as a potential turning point when the likelihood of Fed action significantly increases.

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