93% Polymarket Traders Bet on December Rate Cut — Will Markets Rally Next?
Markets Brace for Final FOMC Meeting of the Year as Traders Bet Heavily on December Rate Cut
With just days left before the Federal Reserve holds its final policy meeting of 2024, tension is building across global markets. Investors, analysts, and trading desks worldwide are positioning themselves for what could be one of the most influential monetary decisions of the year. As the countdown to the December Federal Open Market Committee (FOMC) meeting narrows, market behavior shifts noticeably. Traders are combing through every piece of economic data, every public remark from policymakers, and every signal that may hint at what comes next.
The question that dominates market conversation is straightforward, yet massively consequential: Will the Federal Reserve cut interest rates in December?
Across prediction platforms and institutional research desks, sentiment increasingly points toward a softer policy stance. On Polymarket, one of the most active prediction markets tracking macroeconomic outcomes, traders currently price in a 93 percent likelihood of a 25 basis point rate cut, reflecting overwhelming expectations of easing monetary policy as inflation cools and economic growth slows.
 |
| Source: Xpost |
If these expectations are correct, this meeting may become the moment the Fed formally pivots from its long-running tightening cycle into an easing phase that could shape market performance well into 2025.
Prediction Markets Signal Strong Confidence in Rate Cut
Polymarket traders are known for reacting quickly to macro catalysts, and their current positioning reflects unusually strong conviction. The platform's data shows a near-consensus belief that the Fed will cut rates in December, not just hold. This forecast aligns with broader market sentiment that inflation has moderated enough to provide the central bank room to begin reducing borrowing costs.
A 93 percent probability of easing is not trivial. It implies a widely held belief that the Fed sees inflation progress as meaningful, and that monetary conditions may be recalibrated before year-end. The expectation has already influenced asset pricing across risk markets. Equity traders position for potential upside, crypto traders monitor liquidity trends with anticipation, and currency markets brace for volatility surrounding the dollar’s potential reaction.
In recent weeks, trading volume tied to FOMC outcome speculation has increased steadily. Analysts say this is typical behavior ahead of a major policy shift, but the scale of participation suggests investors may be preparing for more than a marginal adjustment; they are preparing for a directional policy shift.
Cooling Inflation Strengthens the Easing Narrative
Much of the market’s confidence stems from recent economic reports. U.S. inflation trends have shown signs of deceleration, with consumer prices rising more gradually across goods, energy, and housing. Job growth has softened, wage inflation has cooled, and consumer spending is no longer accelerating at peak pandemic-era levels. Credit card delinquencies tick higher, and lending activity slows, reflecting tighter financial conditions already working their way through the economy.
For many analysts, these indicators support the argument that monetary policy is sufficiently restrictive. A rate cut, even minor, could relieve pressure on households and businesses without risking runaway inflation.
The Fed has long maintained that decisions remain data-dependent. And for the first time in over a year, the data appears to be leaning clearly toward accommodation rather than further tightening. That dynamic fuels the ongoing narrative across research notes, trading desks, and financial media coverage.
Wider Market Reaction Expected if the Fed Moves
A potential December rate cut carries implications far beyond U.S. borders. Markets across the world may respond sharply, as U.S. monetary policy influences everything from global bond yields to cryptocurrency liquidity. Historically, interest rate reductions boost risk sentiment, encouraging investors to pursue higher-yielding assets.
If the Fed confirms a pivot:
-
Equities may experience a year-end rally as growth stocks regain momentum.
-
Bonds could see yields fall, lifting prices as investors reposition into longer-duration assets.
-
Foreign exchange markets may witness a softer U.S. dollar relative to global currencies.
-
Gold and commodities often rise during easing cycles as hedges against monetary expansion.
-
Cryptocurrencies may benefit from improved liquidity conditions and risk appetite.
Bitcoin and other digital assets have historically reacted strongly to expectations of lower rates due to their sensitivity to liquidity flows. A confirmed cut may signal the beginning of a more supportive environment for speculative markets, potentially intensifying trading activity across exchanges.
A Turning Point for 2025 Market Outlook
If the Federal Reserve initiates a rate cut in December, the policy shift could set the tone for the first half of 2025. Analysts expect a change in forward guidance, signaling whether additional cuts may follow in the first quarter. The tone and language of Fed Chair Jerome Powell’s post-meeting remarks will be scrutinized closely. Every sentence could move markets.
Should the Fed choose to pause instead of cut, volatility could rise more sharply. Traders may unwind speculative positions rapidly, possibly pressuring equities and crypto markets in the short term. However, even a hold accompanied by dovish guidance could keep sentiment intact and delay easing rather than erase it.
In either scenario, December’s meeting appears poised to become a defining moment in the monetary roadmap.
Institutional Money Watches Closely
Hedge funds, pension funds, and asset managers worldwide are preparing strategies ahead of the announcement. Portfolio rebalancing often accelerates in December, particularly when monetary policy expectations shift. Many firms may use the meeting to finalize year-end positioning or adjust exposure in anticipation of the 2025 cycle.
Institutional commentary increasingly highlights the same core message: policy direction matters more than the size of the move. A minor cut may spark the same sentiment shift as a larger one if it signals a long-term easing cycle ahead.
Market Sentiment Enters Final Countdown Mode
The financial world now operates on a five-day countdown clock. Analysts expect heightened volatility as the meeting approaches, with trading volume likely to climb further. Volatility indexes reflect cautious optimism, pricing movement without panic. Meanwhile, prediction markets continue to reinforce the rate cut narrative with strong conviction.
Traders understand that central bank decisions do not merely influence short-term price movement; they shape the structure of global risk allocation. And as December approaches, the overwhelming expectation remains clear: markets believe the Fed’s next move will be a step toward lower rates.
Conclusion
As we approach the last FOMC meeting of the year, global markets stand at a crossroads. Inflation is cooling, economic growth moderates, and macro signals point toward a potential easing cycle. Whether the Federal Reserve follows through with a 25 basis point rate cut or opts to hold steady with dovish guidance, the impact will ripple across financial markets.
Stocks, bonds, currencies, crypto, and commodities may all move decisively once the Fed reveals its hand. One thing is certain: this meeting is not just another date on the calendar. For many investors, it represents the turning point that could shape early 2025 momentum and define how capital flows across risk assets in the months ahead.
The world now waits for December, eyes fixed on the Federal Reserve.
hokanews.com – Not Just Crypto News. It’s Crypto Culture.