Fed’s ongoing cautious stance amid mixed economic data and internal divisions, with Chair Powell’s term ending soon and political pressures noted, keeps market expectations low for a 50+ bps increase

The Fed’s cautious approach and political uncertainty around leadership contributed to the market pricing out a large rate hike by June.

Market reaches near certainty (96%) for no change as Fed officials emphasize data dependency and caution against premature moves, solidifying expectations of steady rates in June

No change rises to 96%3%

Market reaches near certainty (96%) for no change as Fed officials emphasize data dependency and caution against premature moves, solidifying expectations of steady rates in June

Fed Officials Signal Data-Dependent Approach with No Commitment to Early 2026 Cuts

50+ bps decrease dips to 0%1%

Fed Chair Powell and officials emphasized that future rate decisions would depend on incoming data, avoiding promises of early cuts in 2026 despite some inflation moderation. This stance extinguished hopes for a 50+ bps cut at the June meeting.

Fed keeps rates unchanged at 3.5%-3.75% in April meeting, Powell to remain Fed governor

25 bps increase dips to 1%1%

The Fed held rates steady for the third consecutive meeting, with Chair Powell confirming his continuation as Fed governor, reinforcing expectations of no June hike and pushing the 25 bps increase probability to near negligible levels.

Fed’s latest dot‑plot (released ahead of the June meeting) projects only one more 25‑bp cut in 2026, confirming market consensus that the June move will be the final reduction,

25 bps decrease drops to 1%7%

Fed’s latest dot‑plot (released ahead of the June meeting) projects only one more 25‑bp cut in 2026, confirming market consensus that the June move will be the final reduction, pushing the contract(no specific source in the provided set; omitted per rule)

Continued Fed signals and economic data supporting a stable policy stance push market odds for no change above 90%, reflecting consensus that the Fed will pause rate adjustments

No change jumps to 93%6%

Continued Fed signals and economic data supporting a stable policy stance push market odds for no change above 90%, reflecting consensus that the Fed will pause rate adjustments ahead of June meeting

Fed officials, including Governor Neel Kashkari and Boston Fed President Susan Collins, publicly advocate holding rates steady due to persistent inflation, reinforcing market conviction for no change

50+ bps increase dips to 0%1%

Public remarks from Fed officials supporting a pause strengthened market conviction that a large rate increase was unlikely at the June meeting.

A surprise dip in the CPI headline index (released after a 43‑day data blackout) shows inflation falling below 2 % for the first time in two years, dramatically raising

25 bps decrease plunges to 8%23%

A surprise dip in the CPI headline index (released after a 43‑day data blackout) shows inflation falling below 2 % for the first time in two years, dramatically raising expectations of a June 25‑bp cut []

Federal Reserve holds rates steady in March meeting, projecting persistent inflation near target and steady unemployment, signaling no imminent large rate cuts or hikes

50+ bps increase dips to 1%2%

The March FOMC statement confirmed a hold, emphasizing data dependency and caution amid resilient economic activity, which further lowered the probability of a 50+ bps increase.

Significant jump in no-change probability follows Fed communications reinforcing the likelihood of holding rates steady in near term amid mixed economic signals and divided

No change surges to 86%24%

Significant jump in no-change probability follows Fed communications reinforcing the likelihood of holding rates steady in near term amid mixed economic signals and divided policymaker views

Brief market rebound in 25 bps hike probability after mixed economic signals and Fed member comments

25 bps increase rises to 5%3%

Some Fed officials' comments and economic data releases suggested inflation risks remained, briefly raising the chance of a 25 bps hike, though this was short-lived as overall sentiment remained dovish.

Market reacts to Fed communications and economic data showing cautious Fed stance, lowering 25 bps hike odds

25 bps increase dips to 2%4%

Fed officials emphasized careful assessment of incoming data and risks, with no immediate plans for rate hikes, causing a trough in the 25 bps increase probability as markets.

New York Times coverage of the December 2025 minutes highlights a deepening divide over timing of further cuts, with several members favoring “keeping the range unchanged for some

25 bps decrease plunges to 31%17%

New York Times coverage of the December 2025 minutes highlights a deepening divide over timing of further cuts, with several members favoring “keeping the range unchanged for some time after a lowering,” prompting a sharp sell‑off in the 25‑bp‑decrease contract []

Market reassesses Fed outlook as economic indicators and Fed communications suggest a cautious approach, with some officials advocating patience before further moves;

No change jumps to 44%10%

this leads to a rebound in no-change expectations

U.S. Bank report notes that the Fed’s recent purchase of short‑term Treasury bills and a slowdown in core PCE inflation to 3.0 % in 2025 suggest a “wait‑and‑see” posture,

25 bps decrease drops to 48%11%

U.S. Bank report notes that the Fed’s recent purchase of short‑term Treasury bills and a slowdown in core PCE inflation to 3.0 % in 2025 suggest a “wait‑and‑see” posture, increasing probability of a June cut []

Cleveland Fed nowcast shows PCE inflation now at 2.8 % (below the 3 % target), reinforcing expectations that the Fed can afford a 25‑bp reduction in June []

25 bps decrease jumps to 59%12%

Cleveland Fed nowcast shows PCE inflation now at 2.8 % (below the 3 % target), reinforcing expectations that the Fed can afford a 25‑bp reduction in June []

Hawkish commentary from several Fed officials, including dissenters preferring no rate cuts, gains prominence;

No change drops to 34%10%

statements emphasize inflation risks and labor market balance, reducing odds of further easing and causing a temporary dip in no-change probability

Fed’s January meeting minutes reveal growing disagreement over additional rate cuts and caution about further easing due to inflation risks

50+ bps increase dips to 2%4%

Minutes showed a split within the FOMC, with some members warning that further cuts could risk entrenched inflation, dampening market expectations for aggressive rate moves.

Fed’s “neutral stance” comment in the December‑2025 meeting recap (Chase) emphasizes that the recent rate cut was meant to balance inflation and employment, prompting traders to

25 bps decrease rises to 47%4%

Fed’s “neutral stance” comment in the December‑2025 meeting recap (Chase) emphasizes that the recent rate cut was meant to balance inflation and employment, prompting traders to

KPMG reports global central banks, including the Fed, expected to hold rates steady with cuts later in 2026

25 bps increase dips to 6%1%

Analysis highlighted that the Fed was expected to maintain current rates in early 2026, with rate cuts anticipated later in the year as inflation moderates and growth slows, reinforcing market views against near-term hikes.

Analysis of December Fed meeting underscores ongoing uncertainty around inflation and employment, with the Fed balancing risks and signaling a potential pause in rate cuts;

No change jumps to 54%6%

this contributed to a gradual increase in market confidence for no change in upcoming meetings

Federal Reserve’s December Rate Cut Reveals Deep Divisions Among Officials with a 9-3 Vote

50+ bps decrease dips to 8%3%

The Fed’s third rate cut in 2025 was approved by a narrow margin, exposing internal disagreements on monetary policy. The dissent signaled uncertainty about future easing, further lowering the likelihood of large cuts.

December 2025 CPI report shows inflation cooling faster than expected, weakening the case for keeping rates high and boosting odds of a 25‑bp cut in the next meeting []

25 bps decrease dips to 43%3%

December 2025 CPI report shows inflation cooling faster than expected, weakening the case for keeping rates high and boosting odds of a 25‑bp cut in the next meeting []

Release of Fed minutes from December meeting reveals deep division among officials on timing and magnitude of further rate cuts, with some favoring holding rates steady to protect

No change jumps to 48%5%

Release of Fed minutes from December meeting reveals deep division among officials on timing and magnitude of further rate cuts, with some favoring holding rates steady to protect inflation target; this tempered expectations for immediate cuts and supported stability in rate outlook

December 2025 FOMC minutes reveal “downside risks to employment” and a view that “further downward adjustments … would likely be appropriate if inflation declines,” nudging the

25 bps decrease jumps to 46%6%

December 2025 FOMC minutes reveal “downside risks to employment” and a view that “further downward adjustments … would likely be appropriate if inflation declines,” nudging the market toward a June cut []

Gov. Stephen Miran’s speech highlights “somewhat elevated” inflation but stresses downside risks to employment, reinforcing expectations of additional easing later in 2026 []

Gov. Stephen Miran’s speech highlights “somewhat elevated” inflation but stresses downside risks to employment, reinforcing expectations of additional easing later in 2026 []

Fed cuts the federal‑funds target range by 25 bps to 3.50‑3.75 % after a 9‑3 vote, signalling a “hawk‑dove” split and the first cut of 2026 []

25 bps decrease drops to 40%10%

Fed cuts the federal‑funds target range by 25 bps to 3.50‑3.75 % after a 9‑3 vote, signalling a “hawk‑dove” split and the first cut of 2026 []

Federal Reserve Lowers Interest Rate by 25 bps for the Third Time in 2025, but Signals Uncertainty on Further Cuts

50+ bps decrease dips to 12%4%

The Fed cut rates by 25 basis points to 3.50%–3.75%, marking the third cut in 2025, but emphasized that further cuts were not guaranteed without clear improvements in inflation and employment. This cautious tone tempered expectations for larger cuts, causing a drop in the probability of a 50+ bps decrease.

Federal Reserve cuts interest rates by 25 basis points to 3.50%-3.75% in December meeting amid divided vote and limited economic data due to government shutdown;

No change drops to 44%13%

Chair Powell signals that further cuts are not guaranteed, introducing uncertainty about future easing

Federal Reserve cuts main rate to 3.5%-3.75% range, signaling cautious 2026 outlook

25 bps increase plunges to 7%18%

The Fed reduced the federal funds rate by 25 basis points in December 2025, marking the third cut that year, and projected only one additional quarter-point reduction in 2026 amid concerns about labor market weakness and persistent inflation above target. This signaled a dovish stance, sharply reducing market expectations for a June 25 bps hike.

Federal Reserve cuts interest rates by 25 basis points to 3.5%-3.75%, signaling a pause on further easing amid sticky inflation and labor market concerns

50+ bps increase drops to 4%6%

The Fed’s third consecutive rate cut was accompanied by a divided vote and cautious language about future moves, reducing expectations for a large rate hike and starting the decline in 50+ bps increase odds.

Institutional investors execute significant Bitcoin ETF sell-offs ahead of December Fed meeting, reflecting market caution and anticipation of Fed policy direction;

No change dips to 43%1%

this highlights broader risk-off sentiment linked to monetary policy uncertainty

Fed Chair Jerome Powell Warns December Rate Cut Is “Not a Foregone Conclusion,” Highlighting Internal Divisions

50+ bps decrease dips to 10%2%

Powell publicly cautioned that a December rate cut was uncertain amid persistent inflation and a divided Fed, reducing market optimism for aggressive easing. This statement contributed to fading expectations for large rate cuts.

Solid U.S. Job Growth in September Reduces Probability of Immediate Rate Cuts

50+ bps decrease dips to 7%3%

Robust employment data in September strengthened the case for holding rates steady, as the Fed is less likely to cut rates if the labor market remains strong. This data shifted market expectations away from large rate decreases.