The probability of an interest rate cut in March has dropped to just 7%… What does this mean for the markets?
When the probability of an interest rate cut falls to 7%, it's not just a passing figure…
It's a clear message from the market:
No rate cut is imminent.
But why has pricing in the rate cut fallen so quickly?
Markets had been anticipating an early easing cycle, but recent economic data – both inflation and labor market strength – have completely changed the picture.
Inflation remains above target, and the economy hasn't shown a sharp slowdown that would force the central bank to act immediately.
In other words:
There isn't enough pressure to cut interest rates right now.
What does this mean in practical terms?
1. The dollar remains relatively supported, as higher interest rates for a longer period mean better returns on dollar-denominated assets.
2. Stocks may experience some volatility, as part of the recent rally was based on expectations of a rapid rate cut.
3. Gold may enter a temporary equilibrium, as the metal reacts strongly to monetary policy expectations.
Most importantly:
The shift from expecting an early rate cut to “higher interest rates for longer” is re-evaluating risk across all markets.
The market doesn't just react to the actual decision,
it reacts to expectations.
And when expectations suddenly change, money moves quickly.
The real question now isn't:
Will there be a rate cut in March?
But:
When will the first actual cut begin?
And how many cuts will there be during the year?
Because the next monetary policy cycle will determine the direction of liquidity, the cost of funding, and global risk appetite.
In the markets, 7% means one thing:
March is no longer on the table.
But the cycle isn't over… it's just being postponed.
