FOMC Meeting Draws Global Attention: Rate Cut Expectations Rise, Crypto Market Enters High Volatility Period

Today’s December FOMC meeting has become the focus of global markets, with investors closely monitoring the Federal Reserve’s interest rate decision and economic projections to gauge the direction of monetary policy in 2026 and assess its potential impact on crypto assets such as Bitcoin and Ethereum.

Market forecasts put the probability of a 25 basis point rate cut at as high as 80% to 92%. If realized, the federal funds rate range will fall to 3.50% to 3.75%, marking the third rate cut this year. The likelihood of a pause or a surprise rate hike is extremely low, but any deviation from expectations could still trigger significant market volatility.

In addition to the rate decision, investors are also paying close attention to the Summary of Economic Projections (SEP) and the dot plot. Current analyst consensus expects US GDP growth to remain around 2.1%, the unemployment rate at about 4.2%, and core inflation at roughly 2.5%. The dot plot will reveal policymakers’ forecasts for the pace of rate cuts in 2026, with the market expecting another 3–4 rate cuts in the future. Powell will hold a press conference on December 10 (ET), where he may also discuss whether the pace of quantitative tightening (QT) will slow.

For the cryptocurrency market, this FOMC meeting could serve as a catalyst for short-term volatility. Bitcoin is currently fluctuating between $90,500 and $91,500, while Ethereum is hovering around $3,100. If the expected 25 basis point rate cut occurs and the dot plot is dovish, market liquidity may rise, pushing Bitcoin toward the $92,000–$95,000 range and triggering about $120 million in short liquidations, intensifying upward volatility.

However, if there is a “hawkish cut” or a pause in rate cuts, the market could quickly turn risk-averse. Bitcoin might pull back to the $88,000–$89,000 range, Ethereum could fall below $3,000, and other risk assets would also come under pressure.

Currently, market sentiment is “cautiously optimistic.” Retail investors are becoming more nervous, but institutional funds are still increasing their positions, suggesting that if the outcome is dovish, a short-term pullback could become a new buying opportunity. This FOMC meeting could prove to be an important turning point for the crypto market at the end of the year.