The December FOMC meeting is holding this week, with market participants betting on the committee making a third rate cut of the year. Notably, the Bitcoin price and broader crypto market have rebounded in anticipation of a cut, though historical trends suggest a crash following the meeting this Wednesday.
Fed To Make Third Rate Cut Of The Year At This Week’s FOMC Meeting
CME FedWatch data shows a 90% chance the Fed will cut rates again by 25 basis points at this week’s meeting on December 10. This potential cut will mark the third rate cut of the year, after the committee lowered rates in September and October.
Source: CME FedWatchCrypto traders are also betting on the Fed lowering rates at this week’s FOMC meeting. Polymarket data shows a 95% chance that the committee will make a third rate cut this year at the December 10 meeting.
Source: PolymarketThe odds of a rate cut increased following the release of several macroeconomic data last week, including the September U.S. PCE inflation. The core PCE came in below expectations year-over-year, suggesting that inflation isn’t rising sharply as some Fed officials fear.
During a CNBC interview today, prospective Fed Chair Kevin Hassett also advocated for a 25 basis points rate cut ahead of the December 10 FOMC meeting. However, he stated that they should continue to review the incoming data for upcoming rate-cut decisions.
As CoinGape reported, Hassett has emerged as the favorite to replace Fed Chair Jerome Powell, with Trump recently calling him the “potential Fed chair.” His potential emergence as the next Fed chair is expected to give the U.S. president more control over the Fed even as he continues to advocate for lower interest rates.
How Will BTC React Following The Meeting?
Based on the trend throughout the year, Bitcoin and the broader crypto market are at risk of a significant decline following this week’s FOMC meeting. Crypto analyst Ali Martinez recently pointed out the flagship crypto’s price action following the seven meetings that have been held this year.
The BTC price has heavily corrected following six out of the seven meetings this year. The flagship crypto dropped by 19% following the October meeting, when the Fed made the second cut this year. The largest drop came during the January meeting, when it declined by 25%. On average, Bitcoin has declined by 15% after each meeting this year.
In line with this, Martinez urged market participants to stay cautious. With another rate cut already priced in, the focus will be on Jerome Powell’s press conference after the FOMC meeting, which could provide insights into the Fed’s stance on monetary policy heading into 2026.
Source: https://coingape.com/fomc-meeting-fed-expected-to-approve-rate-cut-on-dec-10/
