Daily · CME Group FedWatch
CME FedWatch translates federal funds futures prices into percentage probabilities for Fed rate decisions at upcoming FOMC meetings. Instead of reading complex futures math, you see a clean number: the market thinks there is a 73% chance of a rate cut at the next meeting. It is the most widely cited real-time gauge of market-implied expectations of Fed policy, updated continuously as futures prices move.
A probability above 70% for a specific outcome at the next FOMC meeting means it is nearly priced in - the Fed rarely surprises when markets are that confident. Between 40-60% means the meeting outcome is genuinely uncertain and data-dependent. Watch how probabilities shift in response to economic data - a hotter-than-expected CPI print can instantly wipe out months of rate cut expectations. The total number of cuts priced in over the next 12 months is as important as the next meeting probability.
Make your call first. You'll learn more from being wrong than from reading the analysis cold.
Make your call. We'll score it when the next release drops.
Analysis updated: Oct 12, 2026
An implied rate of 3.74% rising into mid-2026 suggests markets anticipate the Fed maintaining a moderately restrictive stance because the economy is resilient enough to absorb tighter conditions without recession. This signals that growth and labor market fundamentals remain sufficiently robust to sustain positive real rates, consistent with a soft-landing trajectory. If inflation continues decelerating alongside this pricing, the Fed retains credibility and policy space to cut preemptively should conditions deteriorate.
A rising implied rate path through August 2026 signals that markets are repricing rate cuts out of the forward curve, reflecting persistent inflationary pressures that are proving stickier than the Fed projected. This tightening of financial conditions — particularly if it transmits into elevated mortgage rates, corporate borrowing costs, and tighter credit spreads — could compress investment and consumer spending with a 3–6 month lag. The risk is that the Fed is forced to hold rates higher for longer than the economy can tolerate, increasing the probability of a credit-driven growth slowdown in late 2026.
At 3.74% and rising, the implied Fed Funds rate sits above most neutral rate estimates (r-star), placing real monetary policy firmly in restrictive territory and applying continued drag on rate-sensitive sectors. This reading reflects a macro environment where above-target inflation or strong labor data is repeatedly pushing back the market's expected easing timeline. Key data points to monitor include core PCE monthly prints, the unemployment rate approaching the 4.5% threshold, and the 2-year Treasury yield as a cross-check on whether this forward pricing is consistent with broader fixed income market expectations.
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