69% Chance of 25bp Fed Rate Cut in December, 55% by January
The CME FedWatch tool now shows a 69% probability of a 25bp Fed rate cut at December’s FOMC meeting, up from 67.8% previously forecast, and a 31% chance of unchanged rates. By January, markets assign a 55% likelihood to at least 25bp of cumulative cuts, with a 25% probability of a full 50bp reduction and about 20% odds of no change. These shifts reflect moderating inflation data and mixed economic signals that have pushed investors to price in a more accommodative monetary policy. This trend has already begun to affect bond yields and equity valuations. Crypto traders may see this easing bias as bullish for digital assets, as lower rates can boost liquidity and risk appetite. Monitoring Fed rate cut expectations remains key for timing crypto market entries and managing portfolio risk.
Bullish
Expectations of Fed rate cuts signal easier monetary policy, which tends to drive liquidity into risk assets, including cryptocurrencies. Lower interest rates reduce borrowing costs and boost risk appetite, supporting higher crypto valuations. In the short term, markets may see volatility around Fed announcements, but the overall easing bias is likely to underpin a bullish trend for digital assets. Traders should watch Fed rate cut probabilities closely to time entries and manage risk during potential price swings.