Rate Cut Odds Fall Below 50 %, Tension Rises

Markets hate unpredictability. Yet, within a few days, their certainties collapsed. The probability of a rate cut by the Fed in December, previously the majority view, is now below 50 %. This abrupt change of direction has revived tensions across all asset classes. In the crypto ecosystem, already severely tested by a corrective phase, this resurgence of uncertainty acts as a catalyst for volatility.

Markets revise their bets downwards

The scenario of monetary easing in December still seemed likely in early November. Yet, within a few days, the consensus eroded. The probability of a Fed rate cut in December fell below 50 %, a trend reversal that is starting to worry the markets.

Here are the key facts to remember :

• 67 % of investors anticipated a 25 basis point cut at the December FOMC meeting, according to CME Group data. This probability has now dropped to 45.9 % ;

• This reversal is linked to a deterioration in market sentiment and a more cautious assessment of economic prospects by the Federal Reserve ;

• Jerome Powell, Fed Chair, dampened hopes for a quick easing, stating in October : “an additional reduction of the policy rate at the December meeting is not guaranteed, far from it. Monetary policy is not on a predetermined path”.

This statement fuels the idea that the Fed could keep rates high for longer, especially if economic indicators remain strong. Ray Dalio, founder of Bridgewater Associates, expressed reservations about the Fed’s current strategy : “the Fed is stimulating the economy in a bubble context, which is typical of over-indebted economies near hyperinflation and monetary collapse”.

https://t.co/BytVjrzXkL

— Ray Dalio (@RayDalio) November 5, 2025

This context reinforces concerns about poorly calibrated monetary policy, facing an American economy marked by historically high asset prices, low unemployment, and tight credit spreads.

All this on-chain data helps reorient investors’ expectations, who no longer see a rate cut as a central scenario in the short term. Markets, including crypto, are now adjusting their positions amid greater uncertainty.

The crypto market weighed down by the absence of a monetary catalyst

While the crypto market had largely priced in the October rate cut, it produced no positive effect on prices. On the contrary, the decline continued, as illustrated by the movement of major cryptos over recent weeks.

According to Matt Mena, analyst at 21Shares, this cut was fully anticipated by investors, explaining the absence of a bullish reaction to its announcement. This phenomenon signals a waning momentum in the crypto ecosystem, lacking a clear short-term monetary engine.

The decreased likelihood of further monetary easing in December reinforces this sense of stagnation. Less potential liquidity means less capital injected into risky assets like cryptos, which further weighs on already pressured prices.

In this context, the absence of a rate cut in December could prolong the current consolidation phase, awaiting clearer signals from central bankers. While analysts at Goldman Sachs and Citigroup continue to anticipate three rate cuts in 2025, this outlook remains distant for markets seeking immediate support.

In the short term, investors must cope with a less favorable environment than expected, where monetary catalysts are scarce and uncertainty dominates. In the absence of an employment report due to the shutdown, the Fed’s caution regarding inflation and macroeconomic imbalances reveals a scenario where patience will be required. For the crypto market, this likely means a few more weeks, or even months, without strong impetus.