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CME Fed Watch Data Signals 90% Probability of Fed Holding Rates in March

Despite strong odds of unchanged rates in March, market expectations shift toward higher chances of cuts by June, indicating potential monetary easing later in 2025.

Summary

CME FedWatch data as of February 17 shows a 92.2% probability that the Federal Reserve will keep interest rates unchanged in March and a 7.8% chance of a 25 basis point cut. For April, probabilities are 73.1% unchanged, 25.3% for a 25 basis point cut, and 1.6% for a 50 basis point cut. By June, the likelihood of a 25 basis point cut rises to 52.6%, reflecting increased expectations for monetary easing in the second quarter.

Terms & Concepts
  • CME FedWatch Tool: A financial indicator that analyzes Federal Funds futures prices to calculate the market's probability of future interest rate changes by the U.S. Federal Reserve.
  • Basis Point (bps): A unit of measure for interest rates and other percentages in finance, where one basis point is equal to 1/100th of 1%, or 0.01%.