Probability of a Rate Cut Plummets! December’s odds of a rate cut have dropped sharply to 64.5%. Do you understand what this move signals?

On November 6, CME released a major update: the probability of the Federal Reserve cutting rates by 25 basis points in December is now at 64.5%, with the chance of no cut rising to 35.5%. Just a while ago, the market was nearly 90% confident in a steady rate cut, so this sudden shift is quite striking.

Why has the sentiment changed so quickly? Jerome Powell hinted last month that a December rate cut is “by no means a done deal.” Adding to the uncertainty, the government shutdown has disrupted economic data flow, and within the Fed, debates are intensifying: the hawks are pushing for a 50 basis point cut, while the doves are holding firm.

Markets are already feeling the strain. Powell’s comments caused a sell-off in stocks—U.S. equities turned green immediately after his speech, Bitcoin broke through $100,000, and within 24 hours, 470,000 traders got liquidated. Safe-haven assets like gold and silver also took a hit, with Goldman Sachs warning that U.S. stocks could still fall another 10-20%.

So, that 64.5% probability essentially means the market is still betting on continued easing, but the uncertainty is at its peak. Will the jobs data be strong or weak? Will inflation turn back up? How long will the government shutdown last? The December meeting is likely to be full of heated debates.

For those involved in crypto and U.S. stocks, keep an eye on two key factors: first, when will the U.S. release solid economic data? second, what signals are Fed officials sending out? The outcome of this game will directly determine whether risk assets take off or continue to suffer into the end of the year. Do you think there will be a rate cut in December?