Market participants are closely monitoring the Federal Reserve's upcoming policy announcement, with the central bank set to unveil meeting documentation tomorrow at 3 AM.

The fed rate cut probability continues to shift as traders reassess expectations for monetary policy adjustments. On the CME platform, odds of a 25 basis point reduction in January have climbed to 18.3%, marking a notable jump from the previous week's 15.5% level. This upward revision reflects changing market sentiment around near-term easing possibilities.

Meanwhile, prediction market platforms tell a different story. Polymarket's assessment of the same 25 basis point January scenario remains considerably more conservative, holding steady at 13%. The divergence between these two major indicator sources highlights uncertainty in the marketplace regarding the Fed's true intentions.

The growing fed rate cut probability across CME futures suggests traders are pricing in a higher likelihood of accommodation, though the gap between futures markets and prediction platforms indicates lingering skepticism about whether policymakers will move as aggressively as some optimists expect. This discrepancy provides valuable context for understanding where the smart money currently sits on monetary policy expectations.