Fed Now Has 99% Odds of Holding Rates in January

Prediction markets now show a 99% chance that the Federal Reserve will not cut interest rates at the January 28, 2026 meeting. Traders rapidly shifted expectations over the past few days. Polymarket data shows confidence rising from near 50% to almost certainty. Investors now fully accept that the Fed will maintain its restrictive stance. This signals continued caution from policymakers.

Strong U.S. job growth continues to shape expectations. Employers keep adding jobs at a healthy pace. Wage growth remains firm. Core inflation also stays above the Fed’s 2% target. These factors reduce pressure for immediate easing. The Fed prefers stability over premature stimulus. Officials want more proof that inflation will cool sustainably.

CME Confirms Market Consensus

CME FedWatch reflects similar expectations. Futures traders price over 95% odds for unchanged rates. This alignment strengthens market conviction. Both retail and institutional players now share the same view. Uncertainty has dropped sharply. The January meeting now looks largely predictable.

High Rates Tighten Crypto Liquidity

High interest rates reduce speculative capital. Investors prefer bonds and money markets over risk assets. Crypto markets feel this pressure directly. Bitcoin remains stuck in a tight range near $88,000. Altcoins struggle to attract fresh inflows. Liquidity stays thin across exchanges.

Powell’s Speech Becomes the Key Event

Markets now focus on Jerome Powell’s post-meeting comments. Traders will analyze every word for future guidance. Any hint of rate cuts later in 2026 could spark rallies. Silence could trigger further consolidation. Communication now matters more than the decision itself.

Macro Conditions Still Favor Caution

The Fed wants to avoid repeating past inflation mistakes. Policymakers remember how early easing backfired before. They now prefer patience and data confirmation. This strategy supports financial stability. It also delays major liquidity cycles. Risk assets may need to wait longer for a true macro tailwind.