Markets are now pricing in a very strong chance — about 89.6% — that the Fed will cut interest rates by 25 basis points at the upcoming December meeting. This surge in expectations comes after recent soft economic signals and dovish remarks from some Fed-officials, shifting sentiment toward easing rather than another pause or hike.

Why this matters: a rate cut typically lowers borrowing costs across the board — for mortgages, loans, and corporate borrowing. That tends to boost risk-assets like stocks, and makes non-yielding assets such as gold more attractive.

For investors and traders, this expected move could reshape market dynamics. A cut would likely revive appetite for stocks — especially growth and interest-rate-sensitive sectors — while possibly weakening the dollar and lifting commodities and precious metals. On the flip side, if the Fed surprises markets by holding rates, the shock could trigger volatility, since many portfolios now seem to rely on an easing move.

That said, this 89.6% probability is not a guarantee — it simply reflects market sentiment as of now. Economic data (inflation, jobs, consumer demand) and comments from Fed policymakers in coming days could tilt the outlook sharply.

In short: the odds are heavily stacked in favor of a rate cut this December — but investors should stay alert. The expected cut could set the tone for risk and liquidity across financial markets; but with so much priced in, any deviation from expectations could bring turbulence.