Market Confidence in December Rate Cut Grows Amid Thanksgiving
As Thanksgiving approaches, traders are increasingly confident that the Federal Reserve will implement a quarter-point rate cut in December. Prediction markets and rate-tracking tools indicate that the likelihood of this cut has risen sharply, with platforms like Polymarket showing an 84 chance of a 25-basis-point reduction, up from 66 just five days prior.
Despite months of mixed signals and policy caution, traders now expect the central bank to move forward with a modest trim.
Kalshi echoes this sentiment, also assigning an 84 probability to the quarter-point cut and only an 18 chance of a rate hold. Meanwhile, the CME Fedwatch Tool takes it a step further, showing an 84.9 probability of the target range shifting down to 350 375 basis points for the December 10 policy meeting.
The consistent alignment across platforms highlights a clear market message: traders now expect the central bank to move forward with a modest trim.
With liquidity, holiday trading, and macro uncertainty all in play, even a standard quarter-point cut has become the main focus for traders. While it remains to be seen whether the Fed will comply with these expectations, the markets are currently placing their bets with confidence.