After the Fed cut interest rates by 25 basis points in December, in line with expectations, the market’s attention shifted to the next FOMC meeting in January.
According to the official schedule, the Fed will announce its monetary policy decision after its meeting on January 27-28, 2026.
Recent data from market forecasts indicates that the likelihood of a rate cut at the January meeting is considered quite limited. Market participants expect the Fed to maintain its current interest rate level. According to the data, the “no change in interest rates” scenario is incorporated with a probability of 76%, and the trading volume for this scenario exceeded $4.2 million.
The probability of a further 25 basis point interest rate cut is estimated at 22% in forecast markets. Around $4 million in trading volume was generated for this forecast, while a significant portion of market participants believe the Fed will take a cautious stance in January. The probability of a more aggressive measure, a rate cut of 50 basis points or more, is estimated at just 2%.
On the other hand, the possibility of a rise in interest rates seems almost completely ruled out. According to market forecasts, the probability of an interest rate increase of 25 basis points or more is around 1 percent. Despite high trading volume, this scenario reflects a very low probability.
*This does not constitute investment advice.
