What’s the Fed’s 2026 Playbook? | Presented by CME Group

Summary

The video reviews the Federal Reserve's decision to hold its policy rate at 3.5%-3.75% after three cuts in late 2025. It outlines market expectations from CME FedWatch, which show no cuts in the first three 2026 meetings and roughly 125 basis points of easing by year-end. The Fed emphasizes data dependence and flexibility, with the March SEP update as a potential catalyst for revising the rate outlook.

• Fed held the federal funds rate at 3.5%-3.75% on Jan. 28.
• The committee showed broad support for holding rates steady.
• Market pricing does not anticipate a cut in the first three 2026 meetings.
• CME FedWatch median implies roughly 125 basis points of cuts by end-2026.
• CME interest rate futures reflect a gentle downward drift.
• The Fed stresses flexibility and data dependence for future policy adjustments.
• The March SEP update could revise the 2026 rate outlook.