🔍 Anticipation Builds for January FOMC Meeting
As of January 2, 2025, the Federal Open Market Committee (FOMC) is expected to maintain the federal funds rate during its upcoming meeting on January 29, 2025. Following three consecutive cuts in 2024, market sentiment reflects a cautious stance:
- 88.8% probability of no rate change, as projected by the CME Fedwatch tool.
- An 11.2% chance of a 25-basis-point cut remains.
📊 Market Expectations and Predictions
- Polymarket participants show similar confidence, assigning a 92% probability to no change in rates.
- Kalshi bettors align closely, with 91% odds favoring a steady rate and 10% leaning toward a quarter-point decrease.
🚦 Potential Policy Shifts and 2025 Outlook
Market projections for 2025 suggest:
- Only two additional rate reductions, revised down from earlier expectations of four.
- Speculation about monetary policy changes under the Trump administration may intensify post-meeting.
🔑 Key Observations
Investors will monitor Fed language for clues on future policy and its response to unforeseen economic challenges. The Fed’s cautious approach under Chair Jerome Powell underscores a focus on maintaining stability amid evolving market conditions.