Fed Rate Outlook via CME FedWatch: January 25bps Cut Odds 26.6%, March 25bps Cut 39.4%, Unchanged Still Most Likely

Fed rate expectations remain a key driver for crypto markets, with CME’s FedWatch Tool (per FXStreet) showing a 26.6% probability of a January 25bp rate cut and a dominant 73.4% likelihood of no change to the federal funds rate.

For the March horizon, the tool assigns a 39.4% chance of a cumulative 25bp cut, a 53.4% probability of holding the rate, and a 7.3% probability of a cumulative 50bp cut, underscoring a tempered policy trajectory that can influence liquidity and risk pricing across crypto assets, including Bitcoin.

As traders assess these policy probabilities, monetary policy expectations may shape near-term volatility. Investors should maintain disciplined risk management and monitor credible policy signals to gauge potential shifts in risk sentiment within the digital asset space.