According to CoinMeta, the CME FedWatch tool converts the prices of federal funds futures into probabilities for upcoming interest rate hikes, cuts, and no changes by the Federal Reserve. The commonly mentioned “60% probability of a hike” is not derived from economist surveys, but rather from price movements in the federal funds futures market. This tool is widely watched by traders because market expectations can change rapidly after inflation reports, employment data, and speeches by the Federal Reserve. Importantly, the FedWatch is not a forecast by the Federal Reserve, but rather a reflection of market expectations, which can change dramatically before policy makers meet. According to the calculations of CME, policy changes usually occur in increments of 25 basis points. For example, with a 0.15 basis point hike expectation, the market might assign a 60% probability of a 25 basis point hike and a 40% probability of no hike. The table in FedWatch shows the target interest rate ranges for future FOMC meetings, with the current target range being 3.50%-3.75%.