CME Releases Fed Interest Rate Cut Probability for January Next Year

Summary

According to CME’s ‘FedWatch’ data, as of December 21, 2025, the probability of the Federal Reserve cutting rates by 25 basis points in January 2026 is 22.1%, while the probability of maintaining the current rate is 77.9%.AnueSec+ 2

Impact Analysis

So they’re basically signaling that the market is not heavily betting on a rate cut in January, with only a 22.1% probability. This is a shift from earlier in the month when the probability was slightly higher at 24.4%. The timing is interesting because it comes just before the Christmas rally, which investors are hoping for despite recent market volatility.Sina Finance The lower probability of a rate cut suggests that the market is more focused on the Fed maintaining its current stance, likely due to mixed economic signals like the recent uptick in unemployment and moderate inflation data.AnueSec Bottom line—this data point reinforces a cautious market sentiment, which could mean less aggressive positioning in equities and a potential uptick in bond yields as investors adjust their expectations.