#FedWatch

FedWatch is a tool developed by the Chicago Mercantile Exchange (CME) that helps predict potential actions by the Federal Reserve, particularly regarding interest rate changes. It's used by investors and analysts to anticipate future rate hikes or cuts by the Federal Reserve.

Here's how it works:

Analyzes Futures Prices The FedWatch tool calculates probabilities based on the prices of "30-day Federal Funds" futures. These futures contracts reflect the collective expectations of traders regarding future interest rate decisions by the Federal Open Market Committee (FOMC).

Provides Probabilities By analyzing these futures prices, the tool provides percentage-based probabilities for whether the Fed will raise, lower, or maintain the current interest rate at upcoming FOMC meetings.

Insights for Investors This allows investors to gain insights into market expectations for both short-term and long-term interest rates, helping them adjust their strategies in anticipation of potential rate changes.