{quote} Probably something like that which brings up the question of how do people claim that the market has the fed cuts priced in already or pricing them in now?
Its from AI which is more a detailed than just a simple one line answer
I just checked it and its ok! When people say the market has Fed cuts "priced in," they are referring to a very specific, quantifiable metric derived from financial instruments, primarily Fed Funds futures contracts. It's not a guess or a feeling; it's a hard-nosed, probabilistic analysis based on where trillions of dollars are being wagered in real time.
Here's the breakdown of how it works:
Fed Funds Futures Contracts: These are financial contracts traded on the Chicago Mercantile Exchange (CME). They are essentially a bet on what the average federal funds rate will be for a given month in the future. The price of the contract is quoted as 100 minus the expected interest rate.
For example, if the market believes the average fed funds rate for a future month will be 5.00%, the futures contract for that month would be priced at 95.00 (100 - 5.00).
If the price of that contract rises to 95.25, it means the market is now expecting a lower rate of 4.75% (100 - 95.25). This move reflects a collective expectation of a rate cut.
The CME FedWatch Tool: This is the most widely used tool that makes this complex data easy to understand. It takes the real-time pricing of these Fed Funds futures contracts and converts them into a probability distribution for the outcome of the next Federal Open Market Committee (FOMC) meeting.
It presents the market's collective forecast in a simple, easy-to-read format. For example, it might show:
No change: 5% probability
25 bps rate cut: 90% probability
50 bps rate cut: 5% probability
This is how analysts and traders can confidently say things like, "The market is pricing in a 90% chance of a 25 basis point rate cut."
Why it's so reliable:
Forward-looking: The futures market is inherently forward-looking. Traders and institutions are putting their money on the line to take a position on where rates will be in the future, based on their analysis of the economy, inflation, and the Fed's communication.
Immediate reaction: Any new piece of economic data—like a jobs report, inflation number, or retail sales figure—immediately gets factored into the prices of these futures contracts. If the data is "dovish" (suggests a weaker economy), the price of the futures will rise, reflecting higher probabilities of rate cuts. If the data is "hawkish" (suggests a stronger economy), the price will fall, reflecting lower probabilities of rate cuts.
The "Priced In" concept: The term "priced in" means that the expected rate cut is already fully reflected in the current price of the USD and other financial assets. If the Fed's announcement today matches the market's expectation (e.g., a 25 bps cut), the market's reaction will likely be minimal because the news is already old. The big moves happen when the Fed surprises the market—either by cutting more or less than what was priced in, or by signaling a future path that is different from what traders were expecting.
In summary, "the market has priced in Fed cuts" is not just a phrase; it's a reference to the quantifiable, real-time probabilities derived from the highly liquid and sophisticated Fed Funds futures market. This tool is a cornerstone of our day-to-day trading decisions.
Looking for profitable short term trades ...|
I have this on my other chart. It coincides with the 0.380% fibo from the 1.6038 to 0.9535 drop at 1.2019! 
I'm Aayush.j
But today, someone put several thousand contracts on the market, and someone else had bought them in a matter of minutes.
until price is above 
