The probability of a Federal Reserve rate cut at the January meeting is currently estimated by market participants at just 21%, according to CME FedWatch data 

This low probability reflects the market’s expectation that the Fed will likely maintain current interest rates amid ongoing economic resilience and persistent inflationary pressures. Traders and investors are closely watching upcoming economic data, inflation indicators, and employment reports, as these will heavily influence the Fed’s next moves.

Even a small chance of a rate cut can create volatility in USD pairs, Treasuries, and risk assets, so monitoring Fed statements and market sentiment remains crucial for positioning ahead of the January meeting.

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