Chances of December Rates Cut Drop to 44.4%

Market Sentiment Shifts on Federal Reserve Policy

According to the CME Group’s FedWatch Tool, there’s now only a 44.4% probability that the U.S. Federal Reserve will cut interest rates in December. This shift reflects a growing belief among market participants that the Fed might maintain its current rates longer than previously expected.

Earlier this year, the market was more optimistic about potential easing by the end of 2025. However, recent economic data, including strong labor reports and persistent inflation, has weakened the case for a cut in the short term.

The bond market has already started pricing in fewer cuts, and traders are adjusting portfolios accordingly. This affects everything from equities to crypto assets, as investor appetite for riskier investments typically increases with lower interest rates.

Impact on Crypto Markets

Why does this matter to the crypto world? Historically, crypto prices tend to benefit from lower interest rates. When borrowing is cheaper, liquidity flows more freely into alternative assets like Bitcoin and Ethereum. However, with the reduced odds of a December rates cut, traders may need to adjust expectations for a year-end rally.

While crypto markets have matured, they still react sharply to macroeconomic policies. A delayed rate cut could mean continued volatility or even stagnation, depending on how inflation and global economic trends evolve.

Still, long-term investors might see this as an opportunity. If the Fed eventually pivots in 2026, risk-on assets, including crypto, could see renewed momentum.

Looking Ahead: Policy Uncertainty Remains

Although the odds have decreased, a December rates cut is not entirely off the table. Much depends on upcoming inflation data and broader economic performance. Traders, investors, and crypto holders alike will be closely watching the Fed’s next moves.

For now, the market is signaling caution. Rates cuts, once an afterthought, are now a key part of every investor’s strategy.