Market-implied Fed rate probability for every FOMC meeting, recalculated daily
Federal Reserve Analysis's next policy meeting is scheduled for 16 September 2026. The current market-implied probability of 25bp hike is 83%.
The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. The FOMC meets eight times a year to discuss monetary policy and make decisions about interest rates.
These probabilities are cumulative relative to today, not independent bets placed fresh at each meeting: a given meeting's hike probability is the chance the rate is higher than today's level by that meeting date, and it already includes any move priced in for earlier meetings. A higher probability at a later meeting therefore reflects the accumulation of moves priced in over time, not a series of separate coin flips — these figures should not be added, multiplied, or compared across meetings as if each one stood alone.
The Federal Open Market Committee meets eight times a year to set the target range for the federal funds rate. Rate change probabilities are calculated from Fed Funds futures pricing, as far as available. These probabilities are cumulative relative to today, not independent bets placed fresh at each meeting: a given meeting's hike probability is the chance the rate is higher than today's level by that meeting date, and it already includes any move priced in for earlier meetings.
Each column is one meeting; each row is a policy rate level. Darker means the market puts more weight on that level being in force after that meeting. The outlined row is today’s rate. Read down a column for one meeting’s full distribution — each column sums to 100%.
Shading: share of probability on that rate level. Blank cells carry under 0.5%.
The Federal Reserve uses various economic models to assess appropriate monetary policy. The indicators below show current values, targets, and gaps that inform policy decisions.
| Indicator | Current | Target/Neutral | Gap |
|---|---|---|---|
| Inflation | N/A | 2.00% | N/A |
| Output Gap | -0.04% | 0.00% | -0.04 pp |
| Unemployment | 4.10% | N/A | N/A |
The theoretical rate is derived from a simplified Taylor Rule that considers current inflation, the output gap, and the neutral interest rate. This provides a benchmark for assessing whether current policy is restrictive or accommodative relative to economic conditions.
Note: Model outputs are estimates based on economic data and should not be considered predictions of Federal Reserve actions.
Speech At Reuters NEXT Newsmaker Interview, Washington, D.C.
Speech At the Stanford Institute for Economic Policy Research, Stanford University, Stanford, California
Speech At The Exchequer Club of Washington D.C., Washington, D.C.
Speech At the New York Association for Business Economics, New York, New York
Speech At the Financial Stability Board Virtual Outreach Event
Speech At "Challenges for Monetary Policy Transmission in a Changing World," a conference sponsored by the Bank of Italy for the research network initiated by the European System of Central Banks, Rome, Italy
Speech At the Reykjavík Economic Conference 2026, Central Bank of Iceland, Reykjavík, Iceland
Speech At the Hoover Institution Annual Monetary Policy Conference, Stanford, California
Speech At the Hoover Institution Annual Monetary Policy Conference, Stanford, California
Speech At the Financial Stability Oversight Council Artificial Intelligence Series Roundtable on Cybersecurity and Risk Management, Washington, D.C.
Speech At the College of Business Administration, University of Detroit Mercy, Detroit, Michigan
Speech At the Brookings Institution, Washington, D.C.
| Meeting Date | Type | Status |
|---|
Markets are pricing in a high probability of rates remaining unchanged at the July FOMC meeting, reflecting expectations of a "wait and see" approach as policymakers assess economic data.
Fed funds futures are currently pricing in a limited probability of rate cuts in 2025, with markets expecting policy rates to remain restrictive in the near term.
My probability calculations are based on federal funds futures pricing data, incorporating my enhanced methodology that achieves 96.3% directional accuracy versus the CME FedWatch Tool. The model uses adaptive volatility parameters and status quo bias adjustments to provide more accurate probability estimates.
Data Sources: CME Group federal funds futures, Federal Reserve Economic Data (FRED), Google News API
Update Frequency: Daily at 6:00 AM EST
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