Memo for Crypto Traders: Several Easy Pitfalls to Watch Out for During Next Week's Fed Rate Decision Night

At 3:00 AM Beijing time on December 12, the final Fed rate decision meeting of 2025 will conclude. This meeting is different—the voting committee is deeply divided: out of 12 members, 5 are clearly against a rate cut, 3 support it, and the rest are on the fence. Looking back at the records, we haven’t seen this many dissenting votes at once since 2019; the atmosphere is quite delicate.

The CME FedWatch tool shows an 84% probability of a 25 basis point rate cut. Is it a sure thing? Not necessarily.

There are three layers of issues behind this number that are easy to overlook:

**Unusually large divisions.** Five dissenting votes mean the hawkish camp is strong. Even if a cut happens, the policy statement will likely have a tightening tone—something like “We’re cutting now, but don’t expect much room for further cuts.”

**Market focus has already shifted.** The debate is not about whether there will be a cut, but what happens after. If the market expects three more cuts next year, but Powell hints at the press conference that “maybe one will be enough,” this gap in expectations is the real trigger for market moves.

**Risk of overpricing ahead of time.** An 84% probability is already priced in; the crypto market may rally in advance over the next couple of days. When the actual decision is announced, it could trigger a wave of profit-taking and outflows.

There's another easily overlooked detail: on December 12, US, European, Korean, and Australian stock markets are all closed, and CME commodities and stock index futures are also paused. In this environment of sharply reduced liquidity, the crypto market could see either extreme volatility or be stuck in a narrow range, waiting for an explosion the next day.

Suggested key timing to note:
- 03:00 Rate decision + Summary of Economic Projections released
- 03:30 Powell press conference (focus on his comments about the pace of future rate cuts)

A few other things to watch this week: Tuesday’s RBA decision will show non-US central bank attitudes; Wednesday’s US labor cost index, if it beats expectations, will give hawks more confidence; Friday, three 2026 FOMC voters will speak, offering an early sense of next year’s policy direction.

In short, this isn’t a simple “cut or no cut” binary; it’s a tug-of-war in expectations management. Set your alarms—not just to watch the result, but to catch the subtleties in Powell’s commentary.