What is the Federal Reserve's interest rate outlook for next year? CME data reveals clues

Question

【ChainWen】The latest market expectation data is out. According to real-time quotes from CME Federal Funds Futures contracts, the probability that the Federal Reserve will keep interest rates unchanged in January is as high as 84.5%, with only a 15.5% chance of a 25 basis point rate cut.

But the outlook becomes interesting further ahead. By the March time window, market expectations for a rate cut have significantly increased. The probability of a cumulative 25 basis point cut has risen to 42.2%, but the majority still expect no change, at 51.8%. There is also a small probability event— a cumulative 50 basis point cut, currently estimated at 6.0%.

These figures reflect two opposing voices in the market. In the short term, the Federal Reserve may continue to hold steady, but many participants are already betting on a policy shift around spring. For crypto asset allocation, every change in interest rate policy is worth paying attention to.

fork_in_the_road · Accepted Answer

January is definitely stagnant, waiting until spring to have a chance. This rhythm is just testing our patience.

Wait, only a 6% chance of a 50bp rate cut? I need to ponder this odds.

Is the window before March really so critical? It feels like someone is about to start bottom fishing again.

Powell's recent moves are really a bit of a roller coaster. Anyway, I’m holding my coins tightly and not moving.

51.8% of people prefer to stay the course, which is the most stable casino mentality, but who can predict accurately...

Short-term inactivity and long-term shift, I’ve seen this routine many times. The ones who really make money are the contrarians.

See you in March for the real answer. Whether to hold or not now—that’s the question.

ContractFreelancer · Answer

January is the highlight, and the hawks are still carrying it

OnchainHolmes · Answer

January's gate is closed, only in March will the real show begin... Basically, this data indicates that the market is betting on a rate cut in spring, but no one dares to bet heavily, a typical wait-and-see attitude.

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84.5% chance of holding steady? Already guessed that. The Federal Reserve is never in a hurry. The question is, where did the expectation of a doubled rate cut by March come from? Any insider info?

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Only a 6% probability of a 50 basis point cut... That's the market's "dare not imagine" scenario. But if they actually cut that much, the crypto world would take off.

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Spring policy shift... I’ve got my eyes on it. This time, it’s really different. Funds have already started positioning early. You’re still fussing over January?

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Honestly, CME data is just a reference. The key depends on what Powell says. One comment can change everything.

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Yes, yes, yes, interest rate movements are a crypto indicator. We need to keep a close eye this time and stay alert.

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Wait, is this data the latest? Feels like it changes every week...

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Whether or not there’s a rate cut, I have one strategy: hold your chips tight and wait for spring.

ImpermanentSage · Answer

1. Staying put in January, only starting to have a chance in March, this pace is really a bit slow.

2. The expectation of interest rate cuts is heating up, but the probability is still fifty-fifty; the market actually has no clear idea.

3. In the crypto space, you still have to watch the Federal Reserve's moves; even a slight change can trigger a riot.

4. Short-term wait-and-see, long-term bets—it's a typical game of uncertainty; whoever bets right gets the gains.

5. Turning in spring? I think it's better to first focus on the coins you hold, don't let the rate hike scare your mindset into collapse.

6. An 84.5% chance of holding steady; this number has given the market a reassurance, but it's only for three months.

7. A 6% chance of a 50 basis point cut—that's a black swan-level surprise; if it really happens, crypto will take off.

8. The market is divided, fighting each other; I'm just watching, anyway both good and bad news can be handled.

9. For the crypto world, this wave of data boils down to four words—interest rates are king.

10. Wait until March; only then will the outcome be clear. Any more expectations now are just wishful thinking.

CryptoNomics · Answer

honestly the 84.5% jan hold probability is just noise tbh... real alpha lives in that march window where the correlation matrix finally breaks down. 51.8% vs 42.2% is statistically insignificant if you account for the endogenous liquidity shock variables most ppl ignore lol

What is the Federal Reserve's interest rate outlook for next year? CME data reveals clues

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