The odds of the Federal Reserve holding interest rates steady at its December 10 FOMC meeting—meaning no rate cut—stand at approximately 50%, based on the latest CME FedWatch Tool data derived from 30-Day Fed Funds futures prices.
This marks a notable increase from earlier in the month, when the probability was around 36-37% as of November 12 . The implied probability of a 25 basis point cut bringing the target range to 3.50%-3.75% has thus fallen to 50.4%, reflecting trader sentiment amid sticky inflation and a cooling labor market.
The cryptocurrency market—valued at approximately $3.8 trillion—has entered a period of heightened volatility and caution, driven by the Federal Reserve’s internal divisions on a December rate cut now ~50% odds of no action and the irrecoverable loss of October CPI and jobs data due to the U.S. government shutdown.
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These factors amplify macroeconomic uncertainty, reducing liquidity for risk assets like crypto while fostering a “wait-and-see” sentiment among traders. Bitcoin (BTC) has dipped below $102,000, erasing recent gains, while Ethereum (ETH) and major altcoins have fallen 4-6% in the past week.
This shift comes on the heels of the Fed’s October 29 rate cut 25 basis points to 3.75%-4.00%, where Chair Jerome Powell emphasized that a December easing “is not a foregone conclusion,” citing internal debates and persistent inflation above the 2% target.
Odds have eroded further from highs of over 90% pre-October meeting, driven by hawkish signals from officials like New York Fed President John Williams, who highlighted the “balancing act” between inflation resilience and labor softening.
A no-cut scenario now ~50% priced in could pressure rate-sensitive sectors like tech and real estate, with models suggesting a potential 1-2% S&P 500 pullback. Broader GDP growth estimates for Q4 2025 may dip to 1.8% if easing stalls.
Bond Yields: The 10-year Treasury yield has ticked up ~10 basis points this week, reflecting higher-for-longer expectations. Platforms like Kalshi and Polymarket echo this, pricing a ~50/50 split for two vs. one total cuts in 2025.
Status of October 2025 CPI and Jobs Data
The ongoing U.S. government shutdown—now in its second month since October 1—has severely disrupted data collection by the Bureau of Labor Statistics (BLS). No collection occurred during shutdown; White House confirms it “will likely not be released even after reopening” due to irrecoverable price surveys.
September CPI (delayed to Oct. 24) showed a 0.3% monthly rise and 3% YoY, but October’s absence leaves a gap for Fed decisions. BLS surveys halted; White House states the report “will likely not be released” post-shutdown, as payroll and household data can’t be retroactively gathered.
Private alternatives like ADP show modest October hiring +~14k weekly avg., but lack BLS comprehensiveness. September jobs were released pre-shutdown on Oct. 3. Powell has noted this creates a “challenging” data void for the December meeting, potentially forcing reliance on private proxies or qualitative assessments.
The shutdown’s politicization—blamed on Democrats by the White House—risks long-term damage to statistical integrity. The rising ~50% odds of no December cut underscore Fed caution amid data blackouts, amplifying uncertainty for investors.
The CME FedWatch Tool shows a near-even split ~50% for a 25 bps cut to 3.50%-3.75%, up from 36% earlier this week, reflecting Fed Chair Jerome Powell’s emphasis on persistent inflation risks amid a softening labor market.
This hawkish tilt—echoed by officials like John Williams—signals fewer easings in 2025 overall, potentially totaling just 50-75 bps versus earlier expectations of 100 bps.
Lower rate cut probabilities correlate with reduced investor appetite for high-risk assets. BTC has declined ~8% from its November 5 peak of $110,000, with ETH down ~10% to $3,800. Altcoins like SOL and XRP have seen sharper drops (5-7%), as capital rotates to safer havens like gold or Treasuries.
Over $600 million in crypto positions were liquidated in the last 24 hours, per CoinGlass data. A no-cut scenario strengthens the U.S. dollar (DXY up ~2% this week) and elevates Treasury yields (10-year at 4.2%), draining liquidity from speculative markets.
Crypto, as a “risk-on” asset, suffers most during such tightening—historically, BTC underperforms by 10-15% in the month following paused Fed easings. Prediction platforms like Polymarket and Kalshi mirror the 50/50 odds, with traders pricing in only one additional cut for all of 2025.
If the Fed holds steady on December 10, models suggest a further 3-5% BTC pullback, potentially testing $95,000 support. Conversely, dovish surprises (e.g., from upcoming Powell speeches) could spark a 5-8% relief rally, as lower odds leave room for upside.
The shutdown—now resolved after 43 days—prevented BLS surveys, rendering October’s CPI (inflation) and jobs reports “likely never releasable,” per White House Press Secretary Karoline Leavitt. This creates a “data blackout,” forcing the Fed to rely on proxies like ADP payrolls (+14k average) or qualitative assessments, which Powell called “challenging.”
Without fresh data, markets lack clarity on inflation September’s 3% YoY as baseline or employment trends, leading to erratic swings. Crypto’s 24-hour volatility index (BVOL) has surged 20% to 45, mirroring 2022’s data-gap episodes when BTC volatility hit 60+.
The absence risks mispriced Fed expectations, with X traders warning of “macro overhang” complicating policy reads. The data void could shave 1-2 percentage points off Q4 GDP growth estimates now ~1.8%, per Goldman Sachs, indirectly pressuring crypto via reduced risk appetite.
Shutdown fallout has already delayed regulatory progress, like Senate crypto market structure bills, stalling institutional adoption. Policymakers are “flying blind,” increasing the chance of a conservative December stance. This heightens tail risks for crypto, where liquidity fears (e.g., continued QT) could cap upside.
Private data suggests modest October hiring, but without BLS confirmation, inflation “stickiness” narratives dominate, favoring a hold. A surprise cut (still 50% priced in) or end to QT on December 1 could inject liquidity, boosting BTC toward $110,000-$115,000 by year-end.
Prolonged uncertainty from data loss could extend the correction, with BTC dominance rising to 58% as alts bleed. Leverage in futures open interest down to $140 billion amplifies downside. Diversify into stablecoins for hedges; monitor Fed speeches this week for clues. Historically, crypto rebounds ~15% post-data normalization, but 2025’s tariff disruptions add layers of caution.