CME FedWatch
A CME tool that converts 30-day Fed Funds futures prices into market-implied probabilities of Fed rate moves at upcoming FOMC meetings.
CME FedWatch is a widely cited tool that translates prices in the 30-day Federal Funds futures market into the market-implied probability of each possible federal funds target range at upcoming FOMC meetings. Because Fed Funds futures settle to the average daily effective fed funds rate over their contract month, their prices encode the market's collective bet on what the Fed will do.
The tool expresses these bets as probabilities — for example, "72% chance of a 25bp cut" at the next meeting. Traders, journalists, and the Fed itself use it as a real-time consensus of rate-path expectations. When economic data or Fed speak shifts those odds, the move shows up in FedWatch within minutes and ripples into the front end of the yield curve.
The practical caveat: FedWatch shows probabilities priced by the market, not a forecast of what the Fed should do — and the math embeds assumptions about meeting timing and any small risk premium in the futures. It is a measure of positioning and expectation, best read alongside the Fed's own dot plot.
Related Terms
Dovish
A monetary policy stance favouring lower interest rates and easier financial conditions to support growth and employment — the opposite of hawkish.
IntermediateFederal Funds Rate
The overnight interest rate at which U.S. banks lend reserve balances to each other — the primary policy rate the Fed targets to steer the economy.
IntermediateFOMC
The Federal Open Market Committee — the Fed body that sets U.S. monetary policy, meeting eight times per year to vote on the federal funds rate target.
IntermediateSOFR
Secured Overnight Financing Rate — the benchmark short-term interest rate based on actual overnight Treasury repo transactions, replacing LIBOR.
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