Market sees nearly 50% chance of a Fed rate cut by the end of January 2020

Markets are becoming more convinced that the Federal Reserve will be more accommodative on rates.

The fed funds futures market is assigning a 47.7 percent probability of a rate cut by Jan. 29, according to the CME's FedWatch tool, which has been a reliable gauge of the Federal Open Market Committee's actions.

The Fed left interest rates unchanged on Wednesday and also indicated that no more hikes will be coming this year.

The CME computes the probability of a rate hike by taking the end-month futures contract, subtracting the level at the beginning of the month, and dividing that by 25 basis points, which is the assumed level of each rate hike.

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