Against the backdrop of declining market sentiment and a pullback in the cryptocurrency market, only 45.9% of investors expect the Federal Reserve to implement a rate cut at the Federal Open Market Committee (FOMC) meeting in December.
Data from the Chicago Mercantile Exchange (CME) Group shows that on November 7, the probability of a 25 basis point (BPS) rate cut in December was close to 67%.
In September, several banking institutions predicted at least two rate cuts in 2025, while market analysts from investment bank Goldman Sachs and banking giant Citigroup each forecasted three 25 basis point rate cuts in 2025.
Interest rate decisions directly impact cryptocurrency prices. Lower rates mean more liquidity will flow into asset markets and drive up prices, while higher rates indicate that liquidity and prices will be suppressed.
The declining probability of a rate cut in December is exacerbating negative market sentiment and may signal that the crypto market will face more severe short-term price pressures before the Federal Reserve resumes rate cuts.
Federal Reserve Chairman Jerome Powell stated in October, "There are strong disagreements about how to act in December. Further rate cuts at the December meeting are not a foregone conclusion—far from it. There is no preset path for policy."
As expected, the Federal Reserve cut rates by 25 basis points in October; however, cryptocurrency prices continued to decline after the rate cut.
Market analyst Matt Mena from investment firm 21Shares pointed out that the October rate cut has been "fully digested" by investors, who widely anticipated this cut months ago.
Economist and former hedge fund manager Ray Dalio warned that the Federal Reserve is lowering rates during a time when asset prices are at historic highs, unemployment is relatively low, and credit spreads are narrow, which is an anomaly in history.
Ray Dalio stated in November that the Federal Reserve may be stimulating the economy into a bubble state, adding that this is a typical characteristic of highly indebted economies heading towards hyperinflation and currency collapse.
Related: Crypto executives discuss Bitcoin (BTC) falling below 94,000, who is to blame?
Original: “Probability of December Rate Cut Falls Below 50%”
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