Will the Fed cut rates in December? The market has basically already bet on it—at next Tuesday and Wednesday’s (December 9-10) FOMC meeting, a 25 basis point rate cut is almost a foregone conclusion.

First, let’s talk data. According to the latest CME “FedWatch” tool, the probability of a 25 basis point cut has soared to 87%, with only a 13% chance of no change. Even more interesting, the probability of another 25 basis point cut in January next year has reached 64%, and some are even betting on a cumulative 50 basis point cut (probability 27%). Market sentiment is clear.

Recently, Wall Street’s major banks have also been frantically revising their forecasts. On December 6, Morgan Stanley suddenly changed its tune—keep in mind, they previously pushed their rate cut expectations all the way to 2026 because September’s jobs numbers were so strong. Why the U-turn now? The reason is simple: The dovish signals from top Fed officials ahead of the meeting are too obvious, and the market has already priced everything in. The Fed is unlikely to suddenly give everyone a shock. Morgan Stanley expects another 25 basis point cut in both January and April next year, with the final rate landing at 3.00%-3.25%.

Bank of America also shifted its stance on December 2, moving from “no change” to “cut 25.” They’re focused on a weakening labor market—private sector jobs dropped by 32,000 in November, the biggest decline in nearly three years. The current state for businesses is “not hiring, not firing,” and the economy is clearly cooling.

Of course, mainstream institutions like Goldman Sachs, JPMorgan, and BlackRock have long been in the rate cut camp, with only a few outliers like Standard Chartered still insisting on “holding steady.”

Why is everyone suddenly so sure about a cut? Three reasons: jobs data really is weakening; New York Fed’s Williams and Governor Waller—key figures—have recently been sending dovish signals loud and clear; and on top of that, the White House’s Hassett (a frontrunner for the next Fed chair) is also dovish and advocates cutting rates soon to avoid a hard landing for the economy.

What does this wave of rate cut expectations mean for the crypto market? Easing liquidity expectations are rising, funding costs are falling, and risk assets should theoretically benefit. But don’t forget, the market has already priced this in—when it actually happens, it could be a classic “sell the news” moment. Short-term volatility will still depend on what Powell says after the actual decision—if he hints that next year’s rate cut pace will slow, market sentiment could instantly reverse.