$BTC $ETH $DOGE Interest rate cut expectations soar to 87%, Federal Reserve, a major impact is coming!

The Federal Reserve's rate cut in December is secured? Internal disputes are raging, and the market bets on three rate cuts by the Federal Reserve next year!!

Introduction: The Federal Reserve will hold a meeting on December 9-10, and a rate cut seems to be a done deal. The market's betting probability has soared to nearly 87%, and Morgan Stanley has quickly revised its forecast to a 25 basis point cut. However, there are significant divisions within the Fed, and a fierce debate is underway.

The market is betting wildly

Currently, the financial market is almost "certain" that the Federal Reserve will cut rates in December, with an expected cut of 25 basis points, lowering the interest rate range to 3.75%-4%. The CME FedWatch tool shows that the probability of a rate cut has reached about 87%. Even Morgan Stanley has revised its prediction for a rate cut in December, abandoning its previous view of "delaying until 2026."

Dovish voices: Hurry to cut rates, protect jobs!

Federal Reserve Governor Michelle W. Bowman recently publicly criticized, pointing out that excessively high interest rates have harmed employment and advocating for increased rate cuts to support the economy.

New York Fed President John Williams also released clear dovish signals, stating that "there is further adjustment space in the short term," moving policy closer to neutral levels, and emphasizing the need to avoid unnecessary risks to the labor market.

San Francisco Fed President Mary Daly was more straightforward. She supports a rate cut in December, believing that compared to inflation rebound, the risk of a sudden deterioration in the job market "is more likely to occur and harder to handle." She worries that once a wave of layoffs begins, the Federal Reserve will struggle to cope.

Hawkish concerns: Inflation is not yet under control!

However, the voices opposing rate cuts are equally strong. After the October rate cut, four voting officials have expressed caution about another cut. They found that inflationary pressures are spreading from tariff-affected goods to domestic services, and the foundation of inflation may be expanding.

They are concerned that if rates are allowed to move to neutral too early, it could weaken the necessary constraints of policy, leading to uncontrolled inflation. Boston Fed President Susan Collins is a typical example—although she supported the rate cut in October, her attitude has now turned "hesitant," believing that the current "moderately restrictive" interest rate level may be necessary to control inflation.

In summary: The market is ready for a rate cut, but the Federal Reserve is engaged in a fierce tug-of-war over "whether to protect jobs or prevent inflation." The meeting in December is bound to be turbulent.