Introduction:
For players in the cryptocurrency market, the Federal Reserve's interest rate policy is key to determining the tightness of the market 'tap'. Currently, the market has fully priced in expectations for a rate cut, but the focus is more on mid-2025. So, will the December FOMC meeting, as the year-end finale, become another node for a rate cut? This article will penetrate the current market noise, combining inflation, employment, and the Federal Reserve's stance to conduct an ultimate simulation of the probability of a rate cut in December, revealing its potential impact on BTC and ETH.
1. Core Conclusion: A rate cut in December is not a high-probability event, but rather a 'verifiable option'
Direct answer: Based on current data, the probability of the Federal Reserve lowering interest rates in December is about 40%. This means it is not a market consensus 'baseline scenario,' but a 'fallback option' that highly depends on economic data in the coming months.
A more likely scenario is: The rate cut cycle begins in the second or third quarter of 2025. If the economy slows moderately and inflation declines smoothly, the December meeting may become the second or third rate cut in this cycle. But if economic resilience is strong and inflation is sticky, the December meeting may remain unchanged.
2. In-depth analysis: The three key variables determining December's fate
The decision in December does not take place in a vacuum; it will summarize the economic data of the second half of the year. The evolution of the following three variables will directly lock in December's outcome.
The 'last mile' of inflation (most critical variable):
Current situation: Although the current CPI and core PCE inflation have come down from their highs, the 'last mile' towards the 2% target is the most challenging, especially with stubborn inflation in the services sector.
Inference: If the inflation data from September to November is consistently and significantly below expectations, showing a clear cooling trend, the Federal Reserve will pave the way for a rate cut in December. Conversely, if inflation data fluctuates and stagnates, the Federal Reserve will have ample reason to 'wait and see,' leading to a sharp drop in the probability of a rate cut in December.
The 'cooling degree' of the labor market (core basis):
Current situation: Although the job market is no longer booming, the unemployment rate remains at historically low levels, and wage growth still shows some stickiness.
Inference: The Federal Reserve seeks 'rebalancing of the labor market,' meaning moderate cooling rather than collapse. If non-farm payroll data stabilizes at 100,000-150,000 and the unemployment rate slowly rises to 4.2%-4.5%, it would be the 'perfect cooling' that the Federal Reserve would welcome. In this case, the probability of a rate cut in December increases. If the job market remains strong, the urgency for a rate cut is very low.
The Federal Reserve's 'official guidance' (forward-looking signals):
Key nodes: Focus on the latest dot plot released by the Federal Reserve after the September and December meetings.
Inference: If the dot plot in September shows that most officials expect the median interest rate at the end of 2025 to be 50-75 basis points lower than the current level (implying 2-3 rate cuts), the market will start to price in rate cuts. If the dot plot or Chairman Powell's speech before the December meeting reveals a stronger 'dovish' signal, the probability of action in December will significantly increase.
3. Scenario forecasting and its impact on the cryptocurrency market
Based on the above analysis, we can outline two main scenarios:
Scenario One (higher probability): Dovish signals have been released, and the market is celebrating in advance
Plot: The Federal Reserve lowers rates for the first time mid-year and releases signals that it may continue to lower rates before the December meeting. Even if there is no action in December, the dovish tone is already clear.
Impact on cryptocurrency: This is the most favorable 'boiling frog' type of benefit for the market. Expectations of liquidity improvement will continue to support the market. Mainstream cryptocurrencies like BTC and ETH may consolidate at high levels, building strength. Market risk appetite will rise, and Altcoins may experience a rotation upward. Your operational strategy should be: accumulate mainstream coins on dips before and after the rate cut cycle begins, and pay attention to altcoins with substantial ecosystem and application potential.
Scenario Two (risk scenario): Inflation rebounds, hawkishness returns
Plot: In the second half of the year, inflation data unexpectedly rebounds, forcing the Federal Reserve to clearly state that 'high interest rates will persist for a longer time,' even mentioning the possibility of rate hikes again.
Impact on cryptocurrency: This will be a fatal blow to the market. A stronger dollar will lead to a comprehensive sell-off of risk assets. The cryptocurrency market will find it difficult to remain insulated and will likely experience a deep correction in sync with U.S. stocks. Your operational strategy should be: decisively reduce positions, increase the proportion of stablecoins or cash, remain patient, and wait for opportunities in the 'golden pit' after the market panic subsides.
Conclusion:
For traders, getting caught up in the 'yes' or 'no' of the December meeting may not be the optimal solution. True wisdom lies in grasping the overarching trend of the rate cut cycle. At present, the direction of rate cuts is clear, but the path and pace remain variable.
Whether or not there is a rate cut in December, the global liquidity turning point is already approaching. For cryptocurrency, which is extremely sensitive to liquidity, this is undoubtedly a long-term fundamental benefit. Smart investors should not make speculative bets now, but closely track every key macroeconomic data point, understand the policy implications behind it, and flexibly adjust their positions and strategies accordingly.
Remember, when the macro environment shifts, staying in the market is more important than timing every fluctuation perfectly.
