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CME’s FedWatch tool shows about an 86.4% implied chance that the Federal Reserve will cut rates by 25 basis points in December. This probability rose after lower US initial jobless claims and recent comments from key Fed officials that signaled more openness to near-term easing.
Analysts link this confidence to softer economic signals and recent comments from Fed officials that suggest greater openness to policy easing. At the same time, major banks such as JPMorgan and Goldman Sachs have moved their forecasts toward a December cut, reinforcing the view that the next shift in policy will arrive before year-end.
These expectations also influence global positioning across bonds, equities, and foreign exchange. Lower policy rates would reduce borrowing costs and encourage some investors to rotate away from cash and short-dated Treasuries. Risk assets, including US stocks and emerging-market instruments, often benefit when traders expect cheaper funding conditions.
Crypto markets also react to this changing outlook. Traders in Bitcoin and Ethereum now watch every adjustment in Fed probabilities, because liquidity conditions often guide flows into or out of digital assets. A confirmed cut in December could reinforce the narrative that monetary policy is shifting toward a more supportive stance for risk-taking.
Bitcoin now trades above $90,000, with some market platforms showing prices close to $91,000 as November ends. The coin has climbed back from recent lows near $80,000, yet it still sits a fair distance below its October high around $126,000.
Furthermore, trading activity remains heavy. Order books and on-chain data point to steady participation from both individual traders and large institutions. Many market analysts describe Bitcoin as highly responsive to shifts in interest rate expectations, since changes in borrowing costs, dollar strength, and available liquidity can all sway demand.
When traders anticipate a Fed rate cut, they often add to positions in Bitcoin and other digital assets. Moreover, lower yields make cash and short-term government bonds less appealing in comparison. At the same time, a weaker US dollar can lift dollar-priced assets, making Bitcoin more attractive to investors around the world.
Also Read: Bitcoin News Today: BTC Nears $40B in Open Interest as Traders Await Federal Reserve Rate Decision
The contest to succeed Jerome Powell when his term ends in May 2026 now plays a key role in shaping market expectations. Prediction and betting platforms currently show Kevin Hassett, head of the White House National Economic Council, as the leading candidate for the next Federal Reserve chair, with implied odds in the mid-50% range.
Hassett has called for lower interest rates and favors a growth-oriented policy stance, which lines up with President Donald Trump’s frequent push for easier monetary conditions. Many investors see him as more dovish than Powell, though analysts also point to his mainstream economics background and note that any chair would still face limits set by the broader Federal Open Market Committee.
Reports show that government officials hope to announce a successor by Christmas, and this timeline keeps markets alert to new signals. Bond yields, the US dollar, and rate-sensitive stocks have all responded at times to headlines about Hassett’s chances. Bitcoin traders now treat both the December rate decision and the Fed leadership outlook as key drivers for liquidity, volatility, and long-term positioning in the crypto market.
