Will the Fed Hold Steady in January? Market Bets Reveal Rate Outlook

Fed Likely to Stay on Hold in January

Latest market projections indicate a 95% probability the Federal Reserve will keep interest rates unchanged in January, reflecting a cautious approach amid ongoing economic assessment. With inflation still a concern, policymakers appear reluctant to ease monetary policy prematurely.

Rate Cuts May Emerge by Late Q1

The odds of a 25-basis-point cumulative cut by March have climbed to 20.8%, while the likelihood of no change remains high at 78.4%. A 50-basis-point reduction is nearly off the table, with only a 0.9% chance. This suggests any future easing would likely be gradual and data-dependent.

• Hold rates in January: 95%
• 25bps cut in January: 5%
• Cumulative 25bps cut by March: 20.8%
• Cumulative 50bps cut by March: 0.9%

These figures highlight a measured market outlook, offering clarity for global investors navigating the evolving rate landscape.