Fed March Rate Cut at 9%, Odds of Maintaining Rates Are High

Summary

According to CME FedWatch data on February 4, the probability of a Federal Reserve rate cut in March has fallen to 9%, with the likelihood of rates remaining unchanged at 91%.AnueSec This reflects a significant shift from mid-January when the probability of a March cut was over 20%.AnueSec The change follows the Fed’s January decision to hold rates steady and cautious commentary from officials, who have pointed to a resilient economy and the need for more data before acting.JIN10+ 3 Analysts and traders now widely expect the first rate cut to be delayed until at least June.Zhitong+ 3

Impact Analysis

So the market’s finally thrown in the towel on a March cut. The probability collapsing to single digits just confirms the Fed has successfully jawboned expectations back to reality.AnueSec They’ve been telegraphing patience, and with the economy holding up and some inflation components still sticky, they had no reason to rush.QQ News+ 2 This isn’t a surprise, but a confirmation that the consensus was too dovish.

The game now shifts entirely to the June meeting, which is the new battleground for the first cut.Zhitong+ 2 This means the “higher for longer” theme gets a second wind, which should keep a floor under the dollar and continue to pressure long-duration assets. The easy gains from front-running a quick Fed pivot are over. The focus now has to be on quality and earnings resilience, not just Fed liquidity. I’d stay cautious on speculative growth and favor a stronger USD against more dovish central banks for now.