Federal Reserve Interest Rate Cut Projections: April Shows Strong Signals

Latest data from CME FedWatch released on January 30th shows a shift in market expectations regarding the Federal Reserve’s monetary policy in the first quarter of 2026. An analysis of the probability of interest rate cuts reveals that the chances of lowering rates continue to increase as spring approaches, with April becoming a crucial transition point in the projection.

Projected Monthly Rate Cut Probabilities

For March, the displayed probability remains relatively low. CME FedWatch indicates only a 15.3% chance that the Federal Reserve will cut interest rates by 25 basis points, while the chance of maintaining the current rate reaches 84.7%. This trend shows that the market remains skeptical about a rate cut in the early period.

The situation changes significantly when entering April. The probability of a 25 basis point cut in April jumps sharply to 29.7%, with the probability of rates remaining stable at 67.2%. Additionally, there is a possibility of a deeper cut of 50 basis points with a probability of 3.2%, indicating that market expectations are beginning to open up to more aggressive rate reduction options.

Acceleration Trend Ahead of June

Projections for June show dramatic changes in market sentiment. The probability of a 25 basis point decrease jumps to 48.3%, nearly doubling from April. The chance of rates remaining unchanged drops to 33.7%, while the probability of a 50 basis point cut rises to 16.4%. This data reflects growing expectations that the Federal Reserve will take concrete action to loosen monetary policy in the middle of the year.

Overall, the Federal Reserve’s interest rate projections for the next five months reveal a clear trajectory: from initial uncertainty at the start of the quarter to higher certainty approaching the first half of the year, with April serving as a transitional month where market signals begin shifting toward more significant rate cuts.