CME FedWatch: Markets Price 24.4% Chance of Jan 25bp Cut, 44.4% Odds of 25bp Cut by March

Published: 2025-12-18 00:23:23 |

CME Group’s FedWatch tool shows markets price a 24.4% probability of a 25 basis-point Federal Reserve rate cut in January and a 75.6% chance rates remain unchanged that month. Looking ahead to March, the market-implied odds rise to a 44.4% chance of a 25bp cut, about 46% for no change, and roughly 9.5% for a larger 50bp cut. These shifts reflect evolving expectations around inflation, macro momentum and Fed signalling. Compared with earlier reports that focused on a higher near-term probability of easing (including December), the newer data shift some probability into later meetings, indicating markets now see easing as more likely by March than January. For crypto traders, priced-in easing supports higher risk appetite and could boost crypto inflows and leverage — but outcomes depend on incoming data and Fed commentary. Surprises (strong labor/inflation prints or hawkish Fed remarks) could trigger rapid volatility and re-pricing. Key SEO keywords: Fed rate cut, CME FedWatch, FOMC, monetary policy, crypto market sentiment, liquidity, crypto volatility.

Bullish

Market-implied odds that price a Fed rate cut — particularly rising odds for March — typically increase liquidity and risk appetite. For crypto markets this tends to be bullish: easing expectations can spur inflows, higher leverage and rally in risk assets, supporting upward pressure on crypto prices in the short to medium term. The latest shift (lower odds for January, higher for March) suggests traders are delaying but not abandoning easing expectations, which keeps a bullish bias intact while increasing sensitivity to macro data and Fed communication. Short-term risk: stronger-than-expected economic data or hawkish Fed comments could cause rapid volatility and temporary drawdowns as markets re-price policy. Long-term: if cuts materialize, sustained easier policy would underpin broader risk-on sentiment and higher crypto valuations; if cuts are delayed or absent, the bullish case weakens.