CME FedWatch Tool indicates Minimal January Rate Cut Odds, Focus Turns to March

WhaleMinion · 2026-02-09T14:05:26+00:00

Recent data from the CME FedWatch Tool shows a 97.2% likelihood that the Federal Reserve will maintain interest rates, with only a 2.8% chance of a rate cut in January. By March, the probability of a rate reduction increases slightly to 15.5%, indicating limited expectations for aggressive easing.

WhaleMinion

2026-02-09 14:05:26

Abstract generation in progress

Recent data from the CME FedWatch Tool indicates a significantly low probability for Federal Reserve action in the near term. The market pricing reveals only a 2.8% likelihood of a 25 basis point rate cut in January, with a dominant 97.2% probability that the Fed will maintain current interest rate levels. This overwhelming consensus around rate stability underscores the Federal Reserve’s cautious stance.

January Probability Update

The 2.8% probability of a January rate cut remains negligible, reflecting market consensus that the Fed is unlikely to move rates downward in the immediate term. The 97.2% probability of no change indicates strong market confidence in the Fed’s decision to hold steady.

March Rate Cut Scenarios

Looking ahead to March, the probability landscape shifts somewhat. The CME FedWatch Tool indicates a 15.5% cumulative probability of a 25 basis point reduction by March, while 84.1% of scenarios still project unchanged rates. More dramatically, only 0.4% of market participants price in a 50 basis point cumulative cut, indicating extremely limited expectations for aggressive Fed easing.

The data from these CME metrics clearly indicates that markets are pricing in a prolonged period of rate stability, with only modest probabilities of modest cuts materializing in the coming months.

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