Fed's Interest Rate Cut Probability Forecast for March and April

Summary

According to the CME “FedWatch” tool on February 2, 2026, the probability of the Fed cutting rates by 25 basis points by March is only 15.3%, with an 84.7% chance of holding steady.Zhitong For the April meeting, the probability of a 25 bps cut is 29%, while the chance of rates remaining unchanged is 68%.Zhitong This reflects a broader market shift, with many analysts now forecasting the first rate cut will occur in June 2026, pushed back from earlier predictions of March due to resilient economic data and sticky inflation.Sina Finance+ 2

Impact Analysis

So the market’s finally gotten the memo: the spring rate cut isn’t happening. With March odds now down to just 15%, the narrative has decisively shifted to a mid-year start, likely June.Zhitong+ 2 This isn’t just the futures market; major banks like Goldman and Barclays have already moved their forecasts to June, citing the need for more conclusive inflation data.Sina Finance+ 2 The Fed has successfully managed expectations, convincing the market that they’re in no rush and won’t be pressured into a premature move.AnueSec

Bottom line—this reinforces the ‘higher for longer’ theme. The odds of a surprise aggressive 50 bps cut are basically zero, indicating the market sees a measured, data-dependent Fed.Zhitong This sustained rate differential should keep the US dollar supported. The trade here is to lean into that strength and remain cautious on rate-sensitive assets that were banking on an early pivot. The risk of a cut being pushed even further beyond June is now more significant than it being pulled forward.