Crypto Surges As Fed Eyes Rate Cut In December

The US Federal Reserve could well be starting a decisive turning point. According to the latest data from the CME FedWatch Tool, markets now estimate an 85 % probability of a rate cut as early as December. A rapid development, which contrasts with the firmness displayed in recent months. If this scenario is confirmed, it will mark the end of an unprecedented monetary tightening cycle and could disrupt the balance of financial markets.

The Fed is moving towards monetary easing

The market seems to anticipate a significant monetary policy shift. According to data from the CME FedWatch Tool, the probabilities of a rate cut at the FOMC meeting on December 9 and 10 have jumped to 85 %, whereas they were still largely minority the previous week.

This quick turnaround is fueled by a series of public statements from the Federal Reserve :

• Christopher Waller, Fed Governor, said : “if inflation continues to decline over the coming months, it is quite possible the Fed will start cutting rates in a few months” ;

• Mary Daly, President of the San Francisco Fed, highlighted that “moderation in employment could justify a monetary policy easing” ;

• Recent labor market indicators reveal a slowdown in job creation and stabilization of wage growth ;

• This development, combined with controlled inflation, has strengthened market conviction in imminent monetary easing.

This change in tone is all the more surprising as it sharply contrasts with the caution shown in recent months by the Fed, which remained focused on the goal of price stability. Now, the signals emitted reveal a shift in monetary policy, aimed at avoiding an excessively marked economic weakening.

Cryptos react positively to anticipated easing

While debate rages within the Fed, the crypto market seems to have already decided. Bitcoin, the sector’s largest capitalization, recorded an intraday peak at 88,162 dollars and is now approaching the symbolic 90,000 dollar mark.

Ethereum is up more than 1 % over the last 24 hours, with the clear goal of reclaiming 3,000 dollars. This momentum is not limited exclusively to the two leading assets. Other major cryptos like XRP, ADA, SOL, and BNB also show an upward trend.

The entire market benefits from this wave of optimism, so much so that the total capitalization of assets has exceeded 3 trillion dollars.

Indeed, investors seem to be factoring into their strategies the hypothesis of a return to more favorable liquidity conditions. This phenomenon is accentuated by other macroeconomic factors, such as the recent announcement that Ukraine accepted the terms of a peace plan proposed by Donald Trump to end the conflict with Russia, a news that strengthens the sentiment of geopolitical stabilization and thus the appetite for risk in the markets.

The Fed now faces a decisive choice for December. Between signs of economic slowdown and contained inflation, the option of monetary easing is gaining ground. Markets, led by crypto, are scrutinizing every statement. One misstep, and the momentum could break. A rate cut would redraw the current balance, but the final decision remains dependent on the next FOMC meeting.