Fed March Rate Cut Probability Low, Odds of Maintaining Rates High

Summary

According to CME “FedWatch” data as of February 14, the probability of the Federal Reserve maintaining interest rates at its March meeting is 90.8%, while the probability of a 25 basis point cut is only 9.2%AnueSec. This marks a significant shift from a week prior, on February 8, when the probability of a March cut was 23.2%AnueSec. The Fed had previously signaled a pause in its rate-cutting cycle at its January meeting, holding the benchmark rate at 3.50%-3.75% after three consecutive cutsJIN10+ 2. Officials have emphasized a data-dependent approach, with future moves contingent on changes in inflation and the labor marketSina Finance+ 2.

Impact Analysis

So the market has finally gotten the memo. The fantasy of a March rate cut is officially dead. Just a week ago, futures were pricing a 23.2% chance, and now it’s down to 9.2%AnueSec+ 2. This is simply the market catching up to what the Fed has been telegraphing since its January pause: they are in no rush to cutJIN10+ 2. The real question isn’t about March anymore; it’s about how much the market has to reprice the rest of the year. It’s still pricing in 50-75 bps of cuts for 2026AnueSec. If inflation stays sticky and the economy holds up, those expectations will have to come down next. This strengthens the case for a stronger dollar and keeps a lid on rate-sensitive assets for longer. I’d be cautious on anything that ran up hard on the ‘imminent pivot’ narrative. The pain trade is a further delay, not just pushing the first cut from March to June.