Rate Cut or Hold? Key levels to Watch
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As we approach the December Federal Reserve meeting, speculation about another rate cut is starting to subside. After two interest rate reductions earlier this year, growing concerns about inflation and signs of stability in the labor market have prompted more Fed policymakers to hold off on further easing. December Fed Meeting: Rate Cut Uncertainty Looms Financial markets, which had once expected a 25 basis point (bps) cut in December, are now revising their outlooks. The likelihood of a rate reduction has dropped to below 50%, signaling increasing uncertainty regarding the Fed’s next move. According to data from CME FedWatch, the odds of a rate cut have fallen to 43%, down from 70% just before the last policy meeting. Source:cme data This plunge is indicative of increasing doubt among traders and analysts as to the Fed being willing to ease policy further during the last meeting of 2025. Fed Chair Jerome Powell and other policymakers have been careful to make untimely judgments, worrying about unrelenting inflationary pressures and an incomplete economic picture because of the laggards in several vital economic indicators. The decline in the expectation of a December rate cut has been in the context of statements by some of the major Fed officials, including the president of the Boston Fed, Susan Collins, who has voiced uncertainty on whether additional cuts are necessary. Collins, who supported both of the rate cuts that were made earlier this year, has highlighted the dangers of inflation and mentioned that the labor market seems to be stabilizing. Together with the uncertainty of the economic data as a result of the government shutdown, these remarks have led to the reassessment of the probability of further rate cuts in the market. Inflation and Data Delays Cloud Fed’s Decision The government shutdown is now a thing…
Filed under: News - @ November 15, 2025 12:28 am