95% Probability Fed Will Keep Rates Unchanged in January

Recent Fed Rate Decision Probability Analysis

New data shows that expectations for the Federal Reserve's January rate decision are stabilizing. According to CME Group's Fed Watch tool, there's a 95% probability the Fed will maintain current interest rates in January, with only a 5% chance of a 25-basis-point cut.

Looking ahead, by March, the probability of a cumulative 25-basis-point rate cut rises to 26%, but the chance of maintaining the current rate remains high at 72.8%. The probability of a cumulative 50-basis-point rate cut is only 1.2%.

Market Reactions and Expectations

• Investors generally believe that monetary policy will remain neutral in the short term.
• Most analysts suggest that unless there is significant economic data change, the window for rate cuts may not open until the second half of the year.