Traders see good chance the Fed cuts again in December then skips in January

Market expectations for a December interest rate cut remained strong after the Federal Reserve reduced rates in November, with a 70% probability of a quarter-point cut in December. However, market pricing suggests a 71% likelihood of the Fed skipping a rate cut in January, as indicated by the CME FedWatch Tool. The federal funds rate was lowered to a target range of 4.5% to 4.75% in November, with future rate probabilities derived from trading in 30-day fed funds futures contracts.

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