The Federal Funds futures for January 2021 implies the Fed rate of 2.16% for December 2020. The current Fed rate is 2.40%. Thus, the market expects that the Fed’s tightening cycle ended in December 2018, and the next move will likely be 0.25% down. What are the implications for the financial markets?

US dollar depreciation? Higher commodity prices? Higher stock prices?

Figure 1: January 2021 Federal Funds futures.