The CME Fed Watch tool is handy.
It asks:
- What is the likelihood that the Fed will change the Federal target rate at upcoming FOMC meetings, according to interest rate traders?
And answers:
- Use FedWatch to track the probabilities of changes to the Fed rate, as implied by 30-Day Fed Funds futures prices.
Check out the screenshot:
- current Fed Funds rate is 400-425 bp
- probability of a 25bp cut, to 375-400 (d'uh) is 99%
- probability of a 50bp cut is 1%
A 25bp interest rate cut from the Federal Reserve's Federal Open Market Committee (FOMC) is priced at 99%.
