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Expectations for the Federal Reserve to cut interest rates in December fell sharply, with odds falling below 50% on the major platforms for the first time in a month. Bitcoin fell to $90,410, a loss of 5.4% in 24 hours, as changes in monetary policy expectations affect risk assets.
This sudden change marks a clear departure from the previous certainty. Traders are now awaiting the minutes of the November 19 Open Market Committee meeting to understand the increasingly dovish approach of the Fed.
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The odds of a rate cut are dropping sharply on the major platforms
The prospects for a December rate cut are reflected dramatically on many platforms. According to CME’s Fed Monitor tool, there is a 46.4% chance of a 25 basis point cut and a 53.6% chance of rates remaining unchanged.
Other prediction markets show a narrower trend. It shows up as nothing probability From 55% to not reduce while Polymarket tends look up Price stability by 54%.
Financial markets responded quickly as Federal Reserve officials sent mixed signals. The bond market now reflects “higher for longer” policy expectations, with analysts seeing little chance of a December move.
This change in sentiment stems from concerns about stubborn inflation and the resilience of the economy. What was once a sure turning point toward easing has now become a point of heated debate between market participants and Federal Reserve leaders.
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Federal Reserve officials offered conflicting views ahead of the release of FOMC meeting minutes
Federal Reserve officials sent mixed signals, adding to the uncertainty as the Open Market Committee minutes approached. Governor Christopher Waller stood out as a strong advocate for the December cuts, citing deteriorating business conditions.
Waller argues that core inflation, excluding tariffs, is close to the Fed’s 2% target. He sees tariffs as one-time price shocks rather than sustained inflationary pressure, and urges politicians to ignore these effects.
Vice President Philip Jefferson is calling for caution and a strictly data-driven approach, and did not elaborate on upcoming policy steps in recent remarks. This division among Fed leaders is fueling further market debate.
Federal Reserve Chairman Jerome Powell said His latest comments are that a December cut is becoming less likely. Analysts now think a shutdown is more likely, with many predicting a price cut in March or April 2026.
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The differing opinions within the Fed reflect an internal disagreement. While some focus on the weakness of the labor market, others highlight the problems of inflation and the risks of acting too quickly.
Risk assets decline as economic uncertainty deepens
Changes in expectations of price cuts led to widespread selling of risk assets. Bitcoin has fallen below 90,000down 14% during the week. Cryptocurrency markets are vulnerable when financial conditions tighten and risk appetite fades.
The major stock markets move together. The Dow Jones Industrial Average fell 0.88%, the Nasdaq Composite fell 0.90%, and the S&P 500 fell 0.84%. These declines reflect how uncertainty about prices is now the main force driving the markets.
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At the same time, a disconnect has emerged between business and consumer views on inflation. References to inflation in corporate earnings calls have decreased by 88% since 2021, but consumers still expect 4.7% of future inflation.
This discrepancy may indicate an improvement in business prices or a disconnect between businesses and households.
I got over it Manufacturing probe In the Empire State forecast, it rose to 18.7 versus 5.5. However, stronger data may strengthen the case for keeping Fed policy tight longer than encouraging earlier rate cuts.
Market participants are at a crossroads. Minutes from the FOMC meetings scheduled for November 19 may confirm the change in prices or show ongoing disagreements within the Fed.
However, traders are bracing for significant volatility ahead of the year-end advisory meeting.
