Crypto News: Markets Slash Odds of December Fed Rate Cut Below 50% as Crypto Sell-Off Deepens

The probability of a December interest-rate cut has fallen sharply to 45.9%, down from nearly 67% earlier this month, adding pressure to an already fragile crypto market.Market expectations for a U.S. Federal Reserve rate cut in December have weakened significantly, with CME Group data showing the odds of a 25-basis-point (bps) cut dropping to 45.9%. Earlier this month, on Nov. 7, nearly 67% of investors were betting on a cut.The shift reflects deteriorating market sentiment, persistent macro uncertainty and the ongoing correction across crypto assets.Rate-cut expectations for 2025 also face downward revisionsIn September, major financial institutions—including Goldman Sachs and Citigroup—forecast at least two to three rate cuts in 2025. However, the recent tightening in market conditions is raising doubts about the pace and size of policy easing next year.Why declining rate-cut odds matter for Bitcoin and cryptoInterest rate decisions play a critical role in crypto price performance.Lower rates → more liquidity, stronger demand for risk assets.Higher-for-longer rates → tighter liquidity, weaker crypto prices.The drop in December rate-cut expectations has reinforced the risk-off tone across risk markets. Crypto traders now expect more short-term downside until the Federal Reserve commits to a clearer easing cycle.Fed Chair Jerome Powell: “A December rate cut is far from guaranteed”Federal Reserve Chair Jerome Powell warned in October that policymakers were divided on whether additional easing was appropriate:“A further reduction in the policy rate at the December meeting is not a foregone conclusion — far from it.”The Fed delivered a 25 bps rate cut in October, but the move failed to lift crypto markets, which continued their decline. Analysts at 21Shares said the cut was “fully priced in months in advance.”Ray Dalio warns Fed policy may be fueling a bubbleEconomist and Bridgewater founder Ray Dalio cautioned that the Federal Reserve is cutting rates despite:Record-high asset pricesLow unemploymentLow credit spreadsHe warned the Fed may be stimulating the economy into a bubble, a pattern he says is characteristic of economies heading toward “hyperinflation and currency collapse.”