Fed Rate-Cut Odds at 67%: Traders Prepare, Collins Cautions
Trading odds for a Fed rate cut in December have jumped to around 67–69%, according to Polymarket and CME FedWatch. Traders now assign roughly a 67% chance of a 25-basis-point cut at the December 9–10 FOMC meeting. The probability of holding rates steady has fallen to about 30%, while odds of a 50-basis-point cut are minimal at 2% and near-zero for a rate hike.
This shift in Fed rate cut expectations reflects market reactions to moderating inflation data and recent Fed comments. Boston Fed President Susan Collins urged caution, noting that policy is “in the right place” and calling for more data before easing. She may dissent if the FOMC moves too quickly.
Crypto traders should watch upcoming CPI and employment figures. These key economic releases will drive Fed rate cut odds and could increase market volatility. Lower interest rates may boost liquidity and support risk assets, including cryptocurrencies.
Bullish
The surge in Fed rate cut odds to around 67–69% signals that markets expect looser monetary policy, which typically boosts risk assets like cryptocurrencies. In the short term, rising Fed rate cut probability can increase liquidity, lower borrowing costs, and lift crypto prices. However, Boston Fed President Collins’s cautionary stance and calls for more data may temper extreme market swings and lead to volatility around key economic releases. Over the longer term, sustained rate cuts could support higher crypto valuations, but traders should monitor inflation and employment trends for potential policy pivots.