Market Bets on Fed December 25bp Rate Hike Probability Rise to 86%
nashnova research
The Fed held steady this month, yet markets pushed the probability of a 25 bp December hike to 85.7% — traders read the pause not as a pivot but as a one-meeting skip before rates climb again.
Why did a pause make traders more confident about a hike?
CME FedWatch now shows an 85.7% probability of a 25 bp hike in December, up from 78.3% on Tuesday.
This means → traders did not read the hold as a dovish signal; they see the hike as delayed by one meeting, not cancelled.
In plain terms = the Fed skipped a stop; the market expects it to board the next one.
How much room is left for rate cuts?
The probability of a cumulative 50 bp cut this year plunged from 5.5% to 0.5% — effectively zero.
The chance of another pause in December also fell, from 16.2% to 13.8%.
This means → markets have nearly ruled out any easing this year; the only live debate is "one more hike or none."
What does this mean for everyday investors?
Stronger rate-hike expectations → short-term bond yields likely keep rising, adding pressure on holders of longer-duration assets.
This reflects traders' conviction that inflation remains sticky enough to keep the tightening cycle alive, even after a one-meeting pause.
In plain terms = don't mistake the Fed's breather for a full stop — the market is betting rates have one more turn of the screw before year-end.
市场有风险，内容仅供研究参考，不构成投资建议。