The Federal Reserve’s December FOMC meeting is scheduled for this week, and markets widely expect the Fed to announce its third interest rate cut of 2025. This expectation has already pushed Bitcoin and the broader crypto market higher, as lower rates usually improve liquidity and investor risk appetite.
However, traders remain cautious. Throughout 2025, crypto prices have shown a pattern of rising before FOMC decisions and falling immediately after.
This trend is creating renewed fear that another correction could follow the announcement on Wednesday. Many investors are now watching the Fed’s statement closely to gauge the next move for crypto.
High Chance of a Rate Cut on December 10
CME FedWatch shows there is a 90% chance that the Federal Reserve will cut interest rates by 25 basis points at the December 10 FOMC meeting. If it happens, this will be the third rate cut of 2025, after earlier cuts in September and October.
Crypto markets are also reacting. Prediction platform Polymarket shows a 95% probability of a rate cut, meaning most investors expect the Fed to lower rates again. Bitcoin and other cryptocurrencies have already climbed in anticipation.
The expectation for a cut has grown stronger after recent economic data. The latest U.S. Core PCE inflation came in below forecasts, showing that inflation is not rising as quickly as some Fed officials had feared.
This gives the Federal Reserve more flexibility to reduce interest rates and support economic growth, keeping markets and investors hopeful ahead of the December 10 announcement.
Kevin Hassett Supports a Rate Cut
Kevin Hassett, who is seen as the leading candidate to replace Jerome Powell as the next Fed Chair, also supports a 25 basis points rate cut, according to his interview with CNBC today. However, he said the Fed should continue watching new economic data before deciding on further cuts.
Former President Donald Trump recently referred to Kevin Hassett as a “potential Fed Chair,” raising the possibility that he could take over the position in the near future. If Hassett becomes the new Fed Chair, many analysts believe the White House may have more influence on the Federal Reserve’s decisions regarding interest rates and monetary policy.
Hassett has also supported a 25 basis points rate cut, while emphasizing the importance of monitoring incoming economic data before making further decisions, showing a cautious but proactive approach to managing the U.S. economy.
How Will Bitcoin React After the Meeting?
Analyst Ali Martinez says Bitcoin has fallen after almost every Fed meeting this year. For example, it dropped 19% after the October meeting and 25% after the January meeting. On average, Bitcoin fell about 15% after the seven meetings this year. Only one meeting did not cause a big drop.
This pattern shows that Bitcoin often falls even when the Federal Reserve cuts interest rates. The reason is that markets usually “price in” the expected rate cuts beforehand, so once the announcement is made, investors sell, causing prices to drop. Martinez has advised crypto traders and investors to stay cautious ahead of the upcoming FOMC meeting.
Since another rate cut is widely expected on December 10, the actual market reaction will largely depend on Fed Chair Jerome Powell’s press conference. His statements on interest rates and monetary policy for 2026 could guide both crypto and stock markets in the months ahead.
