Market Odds of January Federal Reserve Rate Cut Edge Up to 17.7% Ahead of Key FOMC Dates

Market expectations for near-term monetary policy have shown subtle shifts as traders digest the latest Federal Reserve signaling. CME FedWatch data from December 28 indicates the likelihood of a 25 basis point rate cut at the January 28, 2026 FOMC meeting has marginally climbed to 17.7%, with markets pricing in an 82.3% chance of the central bank maintaining its current policy stance into the new year.

Looking beyond the immediate January session, market participants are weighing multiple scenarios for the Federal Reserve’s path through the first quarter of 2026. The odds of rates staying unchanged through the March 18, 2026 FOMC session stand at 46.7%, while expectations for an aggregate 25 basis point reduction over this period settle at 45.6%. A more aggressive scenario involving a combined 50 basis point cut carries just 7.7% implied probability.

The dual FOMC meeting schedule—with policy decisions slated for January 28 and March 18, 2026—provides two potential inflection points for the rate trajectory. Current market positioning reflects lingering uncertainty about the timing and magnitude of potential easing, with nearly half of traders still betting on unchanged rates through spring, while a significant contingent anticipates at least one modest reduction in the coming months.