CME FedWatch Signals 70% Chance of December Fed Rate Cut
CME FedWatch data on Nov. 6 shows markets assign a modest majority probability to a December quarter‑point Fed rate cut, with remaining odds favoring no policy change.
Fact Check
The assessment is "likely_true" with high confidence based on strong, consistent evidence from multiple authoritative sources. Three separate, highly relevant articles from the Financial Times and Blockworks directly cite CME Group data on federal funds futures—the same data used by the CME FedWatch tool. These sources report the probability of a December rate cut as 65%, 66%, and 67%, respectively. While none of these sources state the probability is exactly 70%, these figures are extremely close and represent the same market sentiment. Market-implied probabilities fluctuate, so a 70% reading at a slightly different point in time is highly plausible. The Federal Reserve Bank of Atlanta's tracker also confirms its use of CME Group market data, reinforcing the credibility of the data source mentioned in the claim. There is no conflicting evidence; all relevant sources point to a high probability of a rate cut in the high 60s. The minor numerical difference does not undermine the fundamental accuracy of the statement.
Summary
CME Group’s FedWatch tool on Nov. 6 indicated a 64.5% probability of a 25 basis point U.S. Federal Reserve rate cut in December, while 35.5% of market participants expect no change. The probabilities, based on futures market data, suggest traders lean toward easing but still see substantial chances of rates being held steady.
Terms & Concepts
- CME FedWatch: A market-based tool from CME Group that uses futures prices to estimate the probability of U.S. Federal Reserve interest rate changes.
- Basis Point: A unit equal to 0.01% used to express changes in interest rates or yields.
- Fed Rate Cut: A reduction in the benchmark interest rate set by the U.S. Federal Reserve to influence economic activity.