Fed Cancels December Rate Cut, 18% Chance of Hike, Slowing Bitcoin Rally

Why It Matters

The change signals tighter monetary policy expectations, pressuring risk assets like Bitcoin and influencing borrowing costs for businesses and consumers as the year closes.

Summary

The Federal Reserve lowered its policy rate by 25 basis points to a target range of 3.75%‑4.00%, but futures markets have now erased expectations of an additional cut in December, leaving an 18% probability of a rate hike instead. The shift reflects traders’ reassessment after the FOMC meeting, despite earlier optimism from easing inflation and a softening labor market. The revised outlook dampened momentum in the Bitcoin rally, which had been buoyed by the prospect of further monetary easing. Market participants now anticipate a more cautious monetary stance through year‑end.