December Rate Cut Odds Jump to 80.9%

Investor expectations for a December interest rate cut by the U.S. Federal Reserve have surged dramatically. Just last week, markets priced in the odds at 42.4%. Now, they’ve jumped to 80.9%, according to the latest data from rate futures markets.

This sharp increase reflects changing sentiment around inflation, economic growth, and the Fed’s approach to monetary policy. With inflation showing signs of cooling and several Fed officials hinting at a more dovish stance, traders are betting that the central bank will ease rates sooner rather than later.

What’s Fueling the Shift in Market Sentiment?

There are a few factors driving the growing confidence in a December rate cut. Recent economic indicators have shown a softening in both inflation and consumer demand. As price pressures ease, the Fed has more room to shift toward supporting growth without risking runaway inflation.

Additionally, remarks from some Fed members have hinted that the current policy stance may be sufficiently restrictive. This has further fueled speculation that rate cuts may be on the table by the end of the year.

Bond markets have reacted strongly, with yields dropping and equities rallying as investors anticipate a more supportive monetary environment going into 2026.

What This Means for Crypto and Markets

If the Fed does cut rates in December, it could inject new momentum into risk assets, including cryptocurrencies. Lower interest rates typically reduce the appeal of traditional savings and fixed-income investments, pushing capital into higher-yielding assets like tech stocks and digital assets.

Crypto markets have already shown sensitivity to Fed policy shifts in 2023 and 2024, and a confirmed rate cut could trigger another bullish leg for Bitcoin and altcoins.

However, investors should remain cautious—rate cut expectations are based on current data, and surprises in inflation or job numbers could change the outlook quickly.