November 24, 2025— According to the latest CME Group “FedWatch” tool, financial markets are pricing in a strong likelihood that the U.S. Federal Reserve will cut interest rates again next month, though uncertainty remains over the magnitude of the move.
As of November 24, traders see a 69.4% probability​ that the Fed will lower the federal funds rate by 25 basis points (0.25%) to a range of 4.25%-4.50%​ at its December 17-18 policy meeting. Meanwhile, there is a 30.6% chance​ that the central bank will hold rates steady​ at the current 4.50%-4.75%​ level.
Looking further ahead, expectations for January 2026​ suggest a more aggressive easing path. There is a 56.9% probability​ that the Fed will cumulatively cut rates by 25 basis points​ by then, keeping the benchmark rate at 4.25%-4.50%. However, markets are also assigning a 22.3% probability​ to a 50-basis-point reduction (two back-to-back 25-basis-point cuts), which would bring the rate down to 4.00%-4.25%. A smaller 20.8% chance​ remains that the Fed will leave rates unchanged​ through January.
The shifting probabilities reflect ongoing debates among policymakers about how quickly to respond to cooling inflation and potential risks to economic growth. While the Fed has already begun cutting rates from their 2022-2023 highs, markets are watching closely for signs of whether the central bank will opt for a gradual or accelerated easing cycle.
Economists note that a 25-basis-point cut in December​ would align with the Fed’s recent messaging, while a larger move in January​ could signal heightened concerns about slowing labor markets or persistent disinflation.
Investors will be closely monitoring upcoming economic data, including jobs reports, inflation readings, and Fed officials’ speeches, for further clues on the central bank’s next moves. The December decision could set the tone for monetary policy in the coming year, with implications for mortgages, business investment, and consumer spending.