Expectations for a December Federal Reserve rate cut have plummeted faster than my hopes for a coherent Thanksgiving meal. Major platforms now show odds below 50%-a first in a month! Bitcoin, ever the drama queen, took a nosedive to $90,410, losing 5.4% in 24 hours. Who needs holiday cheer when you can have a liquidity crisis?
This abrupt shift is like watching your in-laws argue over the thermostat setting. Traders now await the November 19 FOMC minutes like it’s the final episode of a reality show they’ve invested too much time in.
Rate Cut Odds Fall Sharply Across Key Platforms
The odds of a December rate cut have reversed with the grace of a toddler on a trampoline. According to the CME FedWatch Tool, there’s a 46.4% chance of a 25-basis-point cut and a 53.6% chance of a “let’s just keep this awkward” stance.
Other prediction markets are even more hawkish than my ex’s diet plans. Kalshi shows 55% odds for no cut, while Polymarket leans slightly toward rate stability at 54%.
“A cut was all but certain a month ago,” wrote Barchart, the oracle of hindsight.
Financial markets responded quicker than my cat to the sound of a treat bag. The bond market now reflects an expectation of “higher for longer” policy-because nothing says “festive spirit” like eternal interest rates.
This sentiment shift stems from stubborn inflation and a resilient economy. What was once a near-certain pivot toward easing is now a family feud between Fed members. Spoiler: no one wins.
Fed Officials Offer Conflicting Views Ahead of FOMC Minutes
Federal Reserve officials have sent mixed signals, like a game of charades where everyone forgot the rules. Governor Christopher Waller, the lone voice for a December cut, cites a labor market “near stall speed.”
Waller’s case for cutting rates:
“The labor market is still weak and near stall speed.” (Translation: “I’m bored and need something to do.”)
“A December cut will provide additional insurance against an acceleration in the weakening of the labor market.”
– Nick Timiraos (@NickTimiraos) November 17, 2025
Waller argues core inflation is near the Fed’s 2% goal, conveniently ignoring tariffs. He’s like the uncle who blames the Wi-Fi for the bad sports game.
Vice Chair Philip Jefferson, meanwhile, calls for caution and a “data-driven” approach. Translation: “I don’t want to make a fool of myself.” This division is the Fed’s version of a passive-aggressive holiday card.
Fed Chair Jerome Powell’s recent comments have made a December cut less likely than my chances of remembering to recycle. Analysts now expect a pause, shifting hopes to March or April 2026. Because nothing says “confidence” like planning for next year’s disaster.
The Fed’s internal disagreements are like a group project where everyone’s idea is terrible. Some focus on labor market weakness; others worry about inflation. It’s a yuletide nightmare with no snow.
Risk Assets Slide as Macro Uncertainty Deepens
The changing outlook for rate cuts triggered a sell-off so dramatic, even Warren Buffett blinked. Bitcoin fell below $90,000-a 14% drop over the week. Crypto markets are the emotional support animal of finance: fragile and easily startled.
Major equity markets joined the party. The Dow, Nasdaq, and S&P 500 all dropped like my self-esteem after a holiday dinner. These declines are the financial equivalent of a toddler throwing a tantrum over a missing cookie.
🩸MARKETS PULL BACK AS DECEMBER FED ODDS SHIFT
Kalshi markets now show a 56% chance the Fed holds rates in December. Uncertainty is weighing on equities like my laundry pile.
Major indices are all lower today:
• Dow: -0.88%
• Nasdaq:…– *Walter Bloomberg (@DeItaone) November 17, 2025
Meanwhile, corporate and consumer views on inflation are as aligned as a misfired firework. Mentions of inflation on corporate earnings calls dropped 88% since 2021, but consumers still expect 4.7% inflation. If they were in the same room, it’d be chaos. One’s binge-watching “Inflation Explained,” while the other’s buying a second fridge.
US executives and US consumers have polar opposite views on inflation:
Mentions of “inflation” during S&P 500 earnings calls dropped to 4,300 this quarter. That’s the lowest since Q4 2020-around the time we all learned how to Zoom.
By comparison,…
– The Kobeissi Letter (@KobeissiLetter) November 17, 2025
This contrast may point to improved business pricing or a complete disconnect. I’d bet on the latter.
The Empire State manufacturing survey beat expectations like I beat my neighbor’s kid at Jenga. It surged to 18.7 versus 5.5, but stronger data might mean the Fed stays tight-lipped. No one wins.
Market participants are at a crossroads. The FOMC minutes due November 19 may either confirm the hawkish shift or reveal a Fed full of indecisive, holiday-decorating amateurs. Either way, prepare for volatility or a really awkward small talk session.
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2025-11-18 13:23