The Fed may cut interest rates - current scenarios based on the latest data

According to the latest CME FedWatch indicators from December 28, the market still prices in a very low probability of a quick interest rate cut by the Federal Reserve. The chance of a 25 basis point cut in the first month of next year is 17.7%, while the no-change scenario remains at 82.3%.

Analysts are closely monitoring other possible monetary policy paths. By March of next year, the market calculates a 46.7% chance of maintaining interest rates without any changes. At the same time, the gradual rate cut scenario is gaining significance — a total reduction of 25 basis points during this period has a probability of 45.6%, while a more aggressive scenario with two rate cuts (totaling 50 basis points) is estimated at just 7.7%.

Key dates for market participants are the Federal Open Market Committee (FOMC) meetings scheduled for January 28, 2026, and March 18. These two dates will be crucial for interest rate decisions, which could significantly impact the dynamics of financial markets in the coming months.