Polymarket traders overwhelmingly expect a rate cut
Prediction markets have moved sharply in favor of monetary easing. According to Polymarket data, traders now assign a 90 percent probability that the Federal Reserve will cut interest rates by 25 basis points at the upcoming December 10 meeting.
This surge in expectations reflects shifting sentiment around inflation dynamics, labor market softness, and the Fed’s long-telegraphed path toward policy normalization.
Why prediction markets matter
Unlike traditional analyst forecasts, prediction markets integrate real-time sentiment and capital-weighted probability. Participants wager on outcomes with financial consequences, which often leads to sharper pricing of expectations.
A 90 percent probability implies:
• near-consensus among traders on a December cut
• minimal perceived risk of a “hawkish surprise”
• expectations of follow-up cuts in Q1 2026
• growing belief that disinflation is stable enough to allow easing
Historically, Polymarket probabilities have been a strong leading indicator of market sentiment ahead of major macro events.
What is driving the rate-cut expectations
Several factors support the market’s conviction:
• declining inflation momentum across both headline and core measures
• easing wage growth and labor market cooling
• weakening consumer demand indicators
• signs of tightening credit conditions
• political pressure ahead of 2026 election dynamics
Combined, these trends point toward the Fed prioritizing a “soft-landing” scenario while avoiding prolonged restrictive policy.
How a December rate cut could affect crypto markets
A confirmed 25 bps cut on December 10 would likely influence crypto through several channels:
• weaker dollar liquidity conditions tend to support Bitcoin
• lower yields make risk assets more attractive
• stablecoin supply may increase if financial conditions loosen
• demand for ETFs and digital-asset funds could strengthen
• Ethereum and Solana often outperform during easing cycles
Bitcoin historically reacts positively to rate cuts when they occur outside of crisis environments.
Key risks to the market consensus
While Polymarket traders are confident, several risks remain:
• a hotter-than-expected inflation print
• a rebound in labor strength
• geopolitical tensions raising commodity prices
• hawkish Fed commentary emphasizing caution
Even a 10 percent probability means there is room for volatility if the market is positioned too one-sidedly.
Outlook for December and early 2026
If the Fed cuts rates in December:
• liquidity conditions may turn more favorable for crypto
• Bitcoin dominance could rise initially, followed by rotation into altcoins
• macro volatility may decrease temporarily
• credit markets may stabilize, supporting broader risk sentiment
BTCUSA will continue tracking Polymarket pricing, CME futures, Treasury yields, and Fed communication as the December 10 decision approaches.
