Federal Reserve Square Cut Odds Remain Minimal, CME FedWatch Shows

OnChainSleuth · 2026-02-09T15:16:14+00:00

The CME FedWatch Tool indicates a low likelihood of interest rate cuts in the near future, with a 97.2% chance of rates remaining stable by January. By March, the odds for a 25 basis point reduction increase to 15.5%, suggesting easing remains unlikely.

OnChainSleuth

2026-02-09 15:16:14

Abstract generation in progress

The CME FedWatch Tool, a widely-trusted barometer for interest rate expectations, paints a cautious picture for monetary policy adjustments. Current market pricing shows an extremely narrow window for a square cut—a precise 25 basis point reduction—in the near term.

January Rate Decision: Market Expects Status Quo

Latest readings from the CME platform indicate just 2.8% odds that the Federal Reserve will execute a square cut by January. This translates to a commanding 97.2% probability that rates will hold steady at current levels. The data underscores market consensus that near-term easing remains unlikely, despite mounting discussion around potential rate cuts in crypto and broader financial circles. ChainCatcher analysis confirms this pricing reflects mainstream institutional expectations.

March Timeline: Square Cut Probability Edges Higher

Looking further ahead, the probability landscape shifts modestly. By March, the odds of a cumulative 25 basis point reduction climbs to 15.5%, while the majority expectation—84.1%—still anticipates rates remaining unchanged. This suggests policymakers may begin contemplating adjustment only after Q1 concludes. The prospect of a double square cut (50 basis points total) remains negligible at just 0.4%, indicating deep-seated conviction that aggressive easing is off the table.

What This Means for Markets

These CME metrics reveal how markets are currently pricing the Federal Reserve’s tolerance for easing. The persistent low probability of a near-term square cut reflects broader economic and inflation considerations. Traders and investors monitoring rate-sensitive assets—from equities to cryptocurrencies—will likely remain focused on this data stream as economic conditions evolve over the coming weeks.

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.