Crypto Markets Rally as Fed Rate Cut Odds Hit 67% for December

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Bitcoin is back in the green after a turbulent week, climbing above $86,000 as markets increasingly bet on a possible US Federal Reserve rate cut in December.

Confidence rose sharply after Barclays Research suggested that Fed Chair Jerome Powell may still support a 25-basis-point cut despite internal disagreements among Fed officials.

With few major inflation reports due before the meeting, Powell’s tone could play a decisive role in shaping the final call.

At the moment, the CME FedWatch tool reflects more than 67 percent odds of a December cut, a notable jump from earlier expectations that leaned toward no change.

FED Officials Split as Markets Try to Decode Signals

The Federal Reserve remains divided, offering mixed signals to traders. Some policymakers are open to easing, while others prefer to maintain current rates until more data is available. A portion of the committee is still undecided, making the December meeting unusually uncertain.

Adding another layer to the story, Treasury Secretary Scott Bessent said that the US economy is not facing a recession or a renewed inflation wave. His comments strengthened hopes that a rate cut may not jeopardize economic stability, giving markets more room to rally.

However, not everyone agrees with the idea of cutting rates. Crypto analyst Charlie Bilello argues that the Fed should actually raise interest rates by 50 basis points. He points out that inflation has stayed above the Fed’s 2 percent target for more than five years, while stock and housing prices continue to hit record highs. According to him, cutting rates now would only worsen affordability issues and fuel more inflation.

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Bitcoin Gains Momentum as Sentiment Turns Positive

As the rate-cut narrative gained strength, Bitcoin saw a strong rebound, climbing more than 8 percent from its recent dip into the $81,000 range. Trading volumes are rising again, showing renewed interest from both retail and institutional investors.

Analysts believe Bitcoin could extend its rally if Powell offers even a slight hint of easing next month. Michael van de Poppe expects Bitcoin to retest the $85,200 area before targeting the $90,000 to $96,000 range. Rekt Capital also says that holding above $86,000 keeps the door open for a move toward $93,000.

Meanwhile, analyst Yoshi notes sharp volatility in market expectations, pointing out that the probability of a 25-bps cut jumped from 21 percent to 66 percent in just four days, while odds of no change fell from 75 percent to 30 percent.

Timothy Peterson adds that the market’s confidence in a rate cut may be misplaced, warning that the Fed’s stance is still split six-to-six, creating maximum uncertainty and maximum risk.