Traders are betting the Federal Reserve will hold off on cutting interest rates in January, but will make a move in March, according to the CME FedWatch tool. Currently, FedWatch traders see an 89.3% chance of the Fed leaving rates unchanged at its January FOMC meeting. However, the odds of a 25 basis point rate cut at the March FOMC meeting have risen to 50%. The Fed has been raising interest rates since March to combat inflation, which has hit a 40-year high. However, recent data suggests that inflation may be starting to cool. The Fed is expected to continue raising rates in the near term, but the pace of increases may slow. The CME FedWatch tool reflects the market's expectation that the Fed will eventually pivot to rate cuts in 2023.