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Barchart
Darin Newsom

What Does the Fed Fund Futures Market Tells Us About Wednesday and Beyond?

  • According to news reports, the likelihood of Fed Chairman Powell announcing a 25-basis point rate cut is 90% or more  Wednesday morning. 

  • The Fed fund futures forward curve has been indicating a December rate cut for months, with two more cuts projected in 2026. 

     

  • The US president will name a new Fed chairman in due time, making additional rate cuts more likely. 

Barring a surprise Wednesday afternoon, US Fed Chairman Powell will announce a 25-basis point rate cut at the conclusion of the December meeting of the Federal Open Market Committee. According to chatter on financial media, there is greater than a 90% chance of this happening. While any aspect of a market being that one-sided brings to mind the Poseidon Predicament[i], in this instance I’ll line up along the rail given what we’ve seen for months on the Fed fund futures forward curve. 

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