- Fed cut odds jump to 96% on Polymarket heading into Wednesday’s FOMC meeting.
- Markets await SEP updates that could reshape expectations for 2026 rate policy.
- Internal Fed division and Powell’s tone may decide how Bitcoin reacts in the short term.
The Federal Reserve kicked off its final meeting of the year on Tuesday, Dec. 9, and traders are almost certain about what comes next. Polymarket data now shows 96% odds that the Fed will deliver a 25-basis-point rate cut on Wednesday — the third cut of 2025. The central bank is widely expected to push forward with easing as recession worries, softening labor signals, and political pressure mount. Bitcoin and risk assets have already begun to drift higher, but the true reaction will likely come after Powell’s press conference, where tone matters almost more than the cut itself.
All Eyes on the SEP and How Much the Fed Shifts Its 2026 Roadmap
Alongside the rate decision, the FOMC will release its final Summary of Economic Projections for the year. The last SEP in September projected three rate cuts in 2025 and only one more in 2026, a view that markets increasingly believe is outdated. Investors want clarity on whether policymakers now see a deeper easing cycle ahead, especially as politically connected voices continue pressing for lower borrowing costs. Any shift in the SEP — even minor wording adjustments — could spark volatility across equities, bonds, and crypto.
Internal Division Among Fed Officials Adds New Uncertainty
Another layer of tension is building inside the central bank itself. In October’s meeting, two Fed officials openly voted against the 25-bp rate cut — a rare split that hinted at growing disagreement over how fast the Fed should be easing. With political influence rising and Powell’s own future under scrutiny, Wednesday’s decision will be examined closely for signs of internal fracture. Whether the Fed presents a unified stance or exposes deeper divides will shape how traders price the early months of 2026.
What This Means for Bitcoin and Risk Assets
Bitcoin has hovered near $91,000 heading into the meeting, with traders expecting volatility no matter the outcome. Rate cuts typically boost liquidity and risk appetite, but this cycle has been stranger than usual — Treasury yields have climbed even as markets price in cuts. If the Fed delivers a “hawkish cut,” signaling caution about additional easing, the reaction across BTC, ETH, and altcoins could be choppy. But a dovish tone, or even mild optimism in the SEP, could reopen the door to a year-end crypto rally.
