The market is waiting for the Fed's decision: chances of a rate cut in the new year are increasing

2026-01-12 14:23:13

According to the latest data from the CME FedWatch platform, scenarios regarding the Federal Reserve’s future decisions are gradually changing. As of December 28, the probability that the Fed will decide to cut interest rates by 25 basis points in the first month of 2026 has increased to 17.7%. At the same time, most market participants expect interest rates to remain unchanged, which is reflected in a probability of 82.3%.

Looking at a broader perspective, the likelihood of actual rate changes by the Fed up to March 2026 is as follows: the no-change scenario dominates with a result of 46.7%, but the possibility of a single 25 basis point cut is 45.6%. A more aggressive scenario of a 50 basis point cut remains at 7.7%, suggesting that the market assigns it a lower probability.

The Federal Reserve faces two key FOMC session dates: the meeting on January 28, 2026, and the second on March 18. It is at these meetings that crucial decisions may be made, which the market is closely watching. Current economic scenarios and inflation data will determine the final direction of the Fed’s monetary policy in the first quarter of the new year.

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