Market focus has shifted to the Federal Reserve’s January 28, 2026 meeting after last week’s rate cut, with traders strongly signalling expectations of no further change.
Futures markets indicate policymakers are likely to hold the target federal funds rate steady rather than pursue another adjustment.
Pricing reflects growing confidence that the next Federal Open Market Committee meeting will prioritise patience over immediate policy action.
Federal Reserve Chair Jerome Powell said policymakers broadly agree that inflation remains above desired levels while labour market conditions have softened.
Powell noted that consensus within the FOMC is not the issue, but rather how officials balance inflation risks against economic cooling.
He explained that differing views persist on whether current policy settings are sufficient or whether further easing may be needed later.
“What you see is some people feel we should stop here and that we’re at the right place and just wait, some people feel like we should cut once or more this year and next year,” Jerome Powell said.
Powell also stressed that no members of the board are currently pushing for interest rate hikes.
His remarks were widely interpreted as hawkish in tone despite being delivered in measured and cautious language.
According to CME’s FedWatch Tool, markets assign a 75.6% probability to the Federal Reserve keeping rates unchanged in January.
The probability of a rate cut stands at 24.4%, while expectations for a hike are effectively absent.
Prediction markets have reinforced this outlook, with traders aligning behind a pause in policy moves.
On Kalshi, the “Fed maintains rate” outcome is priced at 79%, significantly outweighing expectations of easing.
Kalshi’s odds for a 25-basis-point cut sit at 22%, with larger moves receiving minimal support.
Polymarket shows similar sentiment, with a 78% probability assigned to no rate change at the January meeting.
A 25-basis-point reduction on Polymarket trails at 21%, closely matching Kalshi’s estimates.
The alignment across futures markets and prediction platforms points to broad confidence in a steady-rate decision.
Analysts interpret this consensus as evidence that markets expect stability rather than abrupt policy shifts.
Powell also addressed political speculation surrounding Federal Reserve leadership during a press exchange.
When asked about public discussion of appointing a new Fed chair, Powell responded directly, saying, “No,” Jerome Powell said.