Big Banks Bet On December Fed Cut As Expectations Hit Extreme Levels
Market confidence in a December rate cut is now overwhelming. CME FedWatch data shows an 89.4% probability that the Federal Reserve will lower its target range to 3.50%–3.75% at the December 10 meeting.
Only 10.6% of traders expect no change, and 0% anticipate a hike. The data highlights a market convinced that policy is too tight for current conditions.
Futures Data Shows Strong Consensus On A Cut
The FedWatch distribution shows traders concentrated almost entirely in the lower-rate bucket. The imbalance makes this meeting one of the most consensus-driven events in years. Markets rarely align so sharply ahead of a decision, which reinforces expectations for a dovish outcome.
The Debate Turns To 2026 As Forecasts Diverge
Consensus breaks down once projections extend beyond December. Standard Chartered believes the December action might stand alone. Its base case holds rates steady through most of 2026 unless economic conditions worsen. Even so, the bank hints at a possible early-2026 cut, perhaps in January, before returning to a wait-and-see strategy.
Citigroup expects a much more active path. The bank anticipates a series of 25 bps cuts through the first half of 2026. Under its forecast, the policy rate would settle near 3.00%–3.25% by midyear. This view suggests a gradual easing cycle rather than a single adjustment.
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Future Leadership Could Shape The Policy Outlook
A key uncertainty is the incoming Federal Reserve leadership expected in spring 2026. A new chair could take a more dovish or more conservative stance. The direction may depend on inflation trends, labor-market data, and the priorities of the next administration. Markets will watch these developments closely as they assess the long-term trajectory of U.S. monetary policy.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
