CME reports 83.4% chance of Fed maintaining current rate

Summary

According to CME’s ‘FedWatch’ tool, there is an 83.4% probability that the Federal Reserve will maintain current interest rates in January, with a 16.6% chance of a 25 basis point cut.CoinLive

Impact Analysis

So, they’re basically signaling that the market expects the Fed to hold rates steady, with an 83.4% probability of no change in January. This is interesting because it comes right after the New Year holiday, a time when markets are typically more volatile. The timing might suggest that investors are cautious about post-holiday market movements, especially given the recent dip in major tech stocks as rate cut expectations cooled off before the holiday.AnueSec The high probability of maintaining rates could stabilize markets in the short term, but it also means that any unexpected economic data could lead to significant volatility. For our portfolio, this might mean looking at sectors that benefit from stable rates, like financials, while being cautious with tech stocks that have been sensitive to rate expectations. Keep an eye on upcoming economic indicators that could shift these probabilities.