Fed Expected to Hold Interest Rates This Week with 97.2% Probability

Fed's Rate Decision Outlook for This Week

According to the latest data from the CME Group, there is a 97.2% probability that the Federal Reserve will keep interest rates unchanged at its upcoming meeting. This reflects a cautious stance from the markets regarding the Fed's monetary policy outlook.

January Rate Cut Probabilities

Specifically, the probability of a 25-basis-point rate cut in January stands at just 2.8%. This suggests that the Fed is unlikely to implement significant easing measures in the short term and may prefer to monitor more economic data before making further decisions.

March Rate Cut Expectations

Looking ahead, the probability of a cumulative 25-basis-point rate cut by March is 17.4%, while the probability of rates remaining unchanged is 82.2%. Additionally, the chance of a 50-basis-point cumulative cut is minimal at just 0.4%. This indicates that even by the end of the first quarter, the Fed’s easing measures are likely to remain limited.

Market Reaction and Outlook

In conclusion, markets currently expect the Fed to maintain a wait-and-see approach, with limited chances of rate cuts in the near term. This could impact both stock and bond markets, and investors should closely monitor the Fed's policy signals and economic data developments.