Half-point Fed rate cut is now unlikely

At this moment, February fed funds futures are priced at 96.8700 which corresponds to an implied target rate of 3.1300%, which implies a 100% chance of the Federal Reserve cutting the target rate by a quarter-point by the end of the month and only a 48% chance of an additional quarter-point cut on top of that. In other words, a half-point cut is now unlikely.

Fed funds futures are typically fairly reliable within 45 days of an FOMC meeting.

The net here is that "the market" is predicting that the Federal Reserve will only cut by a quarter-point at the FOMC meeting next week, but there are still a lot of people who are betting that there is still an outside chance of a half-point cut.

The most profound wisdom I can offer is that all of this is subject to change at a moment's notice.

-- Jack Krupansky