Will the Fed Pause in January? Market Bets Reveal Rate Cut Clues

Fed Likely to Hold Steady in January, Shift Seen by March

Market projections indicate a nearly 90% chance the Federal Reserve will keep interest rates unchanged in January, reflecting a cautious stance amid mixed economic signals.

The probability of no rate change stands at 88.4%, while a 25-basis-point cut is priced at just 11.6%. This suggests policymakers are in wait-and-see mode before making any moves.

Rate Cuts Could Emerge in Spring

• By March, odds of a 25-basis-point cumulative cut rise to 40.3%
• Chance of steady rates remains high at 55.4%
• 50-basis-point cut has only a 4.3% probability

While inflation trends are easing, the Fed may still need stronger evidence of cooling demand before pivoting. Upcoming jobs and CPI reports will be critical in shaping the path forward.