Fed Maintains Rates Unchanged in March at 80.1% Probability

Summary

According to CME FedWatch data, as of February 9th, the probability of the Federal Reserve maintaining interest rates in March is 80.1%, with the probability of a 25 basis point cut at 19.9%. This reflects a shift from early February when the probability of a hold was as high as 91%AnueSec. The Fed’s January meeting ended a series of three consecutive rate cuts, with the committee holding rates at 3.5%-3.75% and describing economic activity as a “solid expansion” while inflation remains “elevated”Zhitong+ 2. Most analysts now expect the Fed to wait until at least June before considering any rate adjustmentsSina Finance+ 3.

Impact Analysis

So the market is still trying to price in a March cut, even with the odds of a hold at 80.1%钛媒体快讯. This is actually a dovish shift from last week when a hold was seen as 91% probableAnueSec, but don’t get distracted by the noise. The big picture is that the Fed just ended its cutting cycle in January, calling the economy “solid” and inflation “elevated”Zhitong+ 2. They’re explicitly in a patient, wait-and-see modeHuxiu.

Remember they took out the language about labor market risks in the last statement—that was a clear hawkish signalZhitong. The Fed is telling us they are in no rush, and the market is slowly repricing this reality, pushing the first expected cut to June or laterSina Finance+ 3. The path of least resistance is for these March cut probabilities to bleed out completely. This “higher for longer” backdrop continues to favor the dollar and puts a lid on rate-sensitive growth sectors. I’d stay underweight long-duration assets.