Recent market indicators suggest a 95% probability that the Federal Reserve will keep interest rates unchanged in January. This reflects a broad consensus among investors that near-term rate cuts are increasingly unlikely.
Minimal Chances for January Cut
Data from leading rate monitoring tools show that the likelihood of a 25-basis-point rate cut at the first 2024 policy meeting stands at just 5%. This signals a significant cooling in market expectations for early monetary easing.
A Glimmer of Hope by March
Looking ahead, the odds of a cumulative 25-basis-point cut by March have edged up to 20.7%. However, the chance of unchanged rates remains dominant at 78.4%. A 50-basis-point cut is nearly off the table, with only a 0.9% probability.
- No change in January: 95%
- 25 bps cut in January: 5%
- Cumulative 25 bps cut by March: 20.7%
- No change by March: 78.4%
- 50 bps cut by March: 0.9%
These figures highlight the Fed's cautious stance amid persistent economic resilience. Traders are now focusing on upcoming labor and inflation reports to gauge when a true policy shift might begin to take shape.