December Fed Rate Cut: A Toss-Up
The odds of a Federal Reserve rate cut in December have dropped to approximately 52%, down from 95% a month ago and 65% a week ago, according to CME's FedWatch tool. A potential 25 basis point cut would reduce the benchmark interest rate range to 3.5%-3.75%. This uncertainty could limit gains in Bitcoin and other cryptocurrencies, with Bitcoin currently trading around $103,000.
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Introduction: Federal Reserve Rate Cut Uncertainty
The Federal Reserve rate cut odds for December have fallen to near coin toss levels, indicating a significant rise in uncertainty among investors. This shift comes as the Dec. 10 meeting approaches, according to data provided by CME's FedWatch tool.
Declining Probability of a Rate Cut
Markets now price approximately a 52% chance of a 25 basis point (bps) cut. This is a sharp decline from a 95% probability noted a month ago and 65% just a week ago. Such a cut would decrease the benchmark interest rate range to 3.5%-3.75%.
Impact on Cryptocurrencies
The diminishing likelihood of a December rate cut could potentially cap gains for Bitcoin (BTC) and other cryptocurrencies. As of now, BTC is trading at $103,000, showing little change over the day, according to CoinDesk data.