📉 Market Expectations (December 2025)
Market expectations have strongly tilted towards a new rate cut in the December meeting.
Rate cut of 25 bps: Data from the Fed's Rate Barometer (CME FedWatch Tool) indicates that the probability of the Fed cutting rates by 25 basis points (bringing the target range to 3.50% - 3.75%) is approximately 80% (data updated as of December 5).
Key Factors:
Inflation: Inflation is considered to be more controlled and within the Fed's target of 2% (although some data remains mixed).
Labor Market: There are signs of a cooling in the labor market and slower economic growth, which justifies the need for less restrictive monetary policy.
End of QT: The Fed has already announced the end of its quantitative tightening process (QT) starting December 1, halting the reduction of its bond holdings.
🚨 The Great Internal Debate (Hawks vs. Doves)
Despite the high probability of a cut, the body is more divided than ever.
"Dovish" Position (Doves): They advocate for cuts to prevent a significant economic slowdown, pointing out that current policy is too restrictive and that inflation is under control.
"Hawkish" Position (Hawks): They argue that inflation remains a risk and that the economy continues to show resilience, so there is no rush to cut and, in fact, they might prefer a pause.
$BTC
Market expectations have strongly tilted towards a new rate cut in the December meeting.
Rate cut of 25 bps: Data from the Fed's Rate Barometer (CME FedWatch Tool) indicates that the probability of the Fed cutting rates by 25 basis points (bringing the target range to 3.50% - 3.75%) is approximately 80% (data updated as of December 5).
Key Factors:
Inflation: Inflation is considered to be more controlled and within the Fed's target of 2% (although some data remains mixed).
Labor Market: There are signs of a cooling in the labor market and slower economic growth, which justifies the need for less restrictive monetary policy.
End of QT: The Fed has already announced the end of its quantitative tightening process (QT) starting December 1, halting the reduction of its bond holdings.
🚨 The Great Internal Debate (Hawks vs. Doves)
Despite the high probability of a cut, the body is more divided than ever.
"Dovish" Position (Doves): They advocate for cuts to prevent a significant economic slowdown, pointing out that current policy is too restrictive and that inflation is under control.
"Hawkish" Position (Hawks): They argue that inflation remains a risk and that the economy continues to show resilience, so there is no rush to cut and, in fact, they might prefer a pause.
$BTC