Today, January 28, 2026, is a major day for the FedWatch. The Federal Open Market Committee (FOMC) is wrapping up its first meeting of the year, with a policy statement and press conference from Jerome Powell scheduled for this afternoon.
Here is the current breakdown based on the latest CME FedWatch Tool data as of this morning:
January FOMC Meeting Probabilities
The market is overwhelmingly pricing in a pause. After three consecutive rate cuts at the end of 2025, the "wait-and-see" approach has become the consensus. Target Rate (bps) Probability Action
350 - 375 95.4% No Change (Current Rate)
325 - 350 4.6% 25 bps CutKey Takeaways & Market Sentiment
The Easing Cycle Hits a Speed Bump: While the Fed cut rates by 75 basis points total in late 2025, persistent inflation (still slightly above the 2% target) and a resilient—though cooling—labor market have given officials reason to hold steady at 3.50%–3.75%.
Political Noise: There is significant chatter regarding pressure from the White House for lower borrowing costs, but the Fed appears focused on maintaining its data-dependent independence.
2026 Outlook: Futures traders are currently betting on a slow year for cuts. The highest probability for the next 25 bps reduction isn't until the June 17, 2026 meeting (currently at ~45% odds).
What to Watch for This Afternoon
The FOMC statement will be released at 2:00 PM ET, followed by Powell’s press conference at 2:30 PM ET. Investors will be scanning for:
"Neutral Rate" Guidance: Does Powell believe we have reached a "neutral" level where rates are neither stimulating nor restricting the economy?
Labor Market Tone: Any shift in language regarding "softness" in hiring could pull forward expectations for a March cut.
Inflation Trajectory: Confirmation that the "disinflation process" is still on track despite the recent pause.