The Federal Reserve's probability of cutting interest rates next year is out: maintaining the current level in January is the mainstream expectation

RumbleValidator · 2025-12-31T00:00:22+00:00

Market data shows that there is an 85.1% probability that the Federal Reserve will keep interest rates unchanged in January next year, with only a 14.9% chance of a 25 basis point rate cut. By March next year, the probabilities of a rate cut and maintaining the current rate are nearly equal, both bringing policy direction uncertainty. Investors should pay attention to how this change may impact capital allocation.

RumbleValidator

2025-12-31 00:00:22

Abstract generation in progress

【BlockBeats】Latest market data shows that the probability of the Federal Reserve maintaining interest rates in January next year is as high as 85.1%, with only a 14.9% chance of a 25 basis point cut. This indicates that maintaining the current policy stance remains the mainstream expectation in the short term.

Looking ahead to March next year, the situation changes. The probability of a cumulative 25 basis point cut rises to 45.2%, while the probability of keeping rates unchanged is 48.3%, indicating that market opinions on the policy direction in late Q1 are still divided. Additionally, the likelihood of a total cut of 50 basis points is small, at only 6.5%.

Overall, the likelihood of the Federal Reserve remaining on hold in the short term is higher, but expectations of rate cuts will gradually increase around spring. For investors concerned with macroeconomic conditions, this shift in policy expectations will directly influence capital allocation strategies.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

7 Likes

Reward
7
5
Repost
Share

Comment

0/400

gas_fee_therapist

· 6h ago

Hold steady in January, only see the real results in March... An 85% probability indicates the Federal Reserve is still observing, just wait for inflation data. --- It's the same old script again, play dead first, then start pretending to understand rate cuts in spring... --- 45 versus 48, roughly a 50/50 split, this market expectation is quite虚得很呢 --- Holding short-term is correct, but once Q1 data comes out, they’ll probably get serious. At that point, the market will explode again. --- Cut 50 basis points directly from 6.5%? Dream on, the Federal Reserve wouldn't be so quick. --- It feels like this data is saying: I’m still thinking... you guys just play around.

View OriginalReply0

SatoshiHeir

· 6h ago

It should be noted that the 85.1% probability data is essentially a reflection of market pricing, rather than a disproof of the Federal Reserve's actual intentions. According to past monetary policy cycles, the observation period before spring is precisely the most dangerous phase for signal accumulation—historical records have long proven that high consensus often indicates a reversal. On-chain capital flows tell me the truth: institutions are quietly positioning themselves, and they do not believe this 85.1%.

View OriginalReply0

MetaverseHomeless

· 6h ago

85.1% chance of holding steady, only cutting interest rates in spring... With this pace, the Federal Reserve has really understood the market psychology.

View OriginalReply0

DaisyUnicorn

· 7h ago

85.1% vs 14.9%, this probability gap... The Federal Reserve is really playing "flower language governance," sticking to the same old tactic of being tough first and soft later.

View OriginalReply0

HodlOrRegret