Digital Assets Rally on FOMC Meeting Expectations: Fed Signals December Policy Shift

The cryptocurrency market is experiencing a notable surge as anticipation builds around December’s FOMC meeting and potential Federal Reserve rate decisions. Market participants are positioning based on renewed optimism regarding monetary policy direction.

Market Signals Point to Shifting Fed Stance

Data from the CME FedWatch Tool reveals a compelling narrative: markets are now pricing in an 85% probability that the Federal Reserve will implement a rate cut at the December 9-10 FOMC meeting. This represents a dramatic shift from just days earlier, when such expectations remained marginal. The change reflects a fundamental reassessment of Fed intentions.

Federal Reserve officials have catalyzed this pivot through carefully chosen public remarks:

• Christopher Waller, Fed Governor, recently noted that continued inflation moderation could prompt the central bank to initiate rate cuts within months
• Mary Daly, President of the San Francisco Federal Reserve, suggested that labor market softening may warrant monetary accommodation
• Recent employment data showing deceleration in job creation and stabilized wage pressures have reinforced the case for easing

This represents a striking departure from the Fed’s previous messaging, which emphasized unwavering commitment to price stability regardless of economic headwinds.

Crypto Markets React to Incoming Monetary Shifts

Digital assets have responded swiftly to these policy signals. Bitcoin, the sector’s largest asset, has surged to an intraday high near $90,500, with the token currently trading around $90.41K and targeting the psychological $90,000 level. Ethereum is consolidating around $3.11K, demonstrating broad-based strength across major cryptocurrencies.

The rally extends beyond flagship assets. XRP, ADA, SOL, and BNB have all participated in the upward movement, driving total cryptocurrency market capitalization above the $3 trillion threshold. This synchronized appreciation suggests investors are frontrunning a return to more accommodative liquidity conditions.

Macroeconomic developments have amplified crypto’s upside momentum. Recent geopolitical developments—particularly announcements regarding diplomatic resolutions—have reduced risk-off sentiment and encouraged investors to re-engage with higher-yielding asset classes.

The December FOMC Meeting: Critical Juncture Ahead

The Federal Reserve now stands at an inflection point. Economic indicators suggest a narrowing window for monetary tightening, with inflation pressures moderating while employment growth cools. These cross-currents have convinced markets that policy normalization is imminent.

However, the scenario remains sensitive to incoming data and Fed communications. Any hawkish revision to the central bank’s messaging could rapidly repricing risk assets including cryptocurrencies. The December FOMC meeting will likely determine market trajectory for year-end rallies, making Fed officials’ statements and economic data releases critical focal points for traders.