UPDATE Market: Only 3 Days Until FOMC! December Rate Cut Probability Soars to 88.4%
Anticipation is Rising: With only three days left until the Federal Reserve's (FOMC) interest rate decision announcement at this year’s final meeting, market sentiment is now almost certain. The latest data from the CME FedWatch Tool shows that the probability of a rate cut in December 2025 has now reached a very high level of 88.4%.
This figure reflects strong expectations among traders and investors that The Fed will continue its easing cycle, likely with a 25 basis point cut, amid signals of a slowdown in the labor market and more controlled inflation pressures.
Major Implications: This nearly 90% probability suggests that the market has almost fully priced in the rate cut.
For the Stock Market: Rate cut decisions are often seen as a positive catalyst that can support growth, especially for interest-sensitive stocks and the technology sector.
For the Bond Market: High cut probabilities usually drive bond prices up (and yields down).
Volatility: Although expectations are high, market participants will scrutinize every word in the FOMC statement and the press conference by Fed Chair Jerome Powell on Wednesday (December 10). The market will look for clues regarding the policy path in 2026—whether this is a 'cautious' cut that will be followed by a pause, or an early signal of a longer easing cycle.
The next three days will be a crucial time for investors to adjust their positions ahead of the monetary policy decision that will shape the end of the year and the economic outlook for the following year.
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