Here's the Chance of an Interest Rate Cut in December 2025, Based on Several Surveys!
Market expectations for an interest rate cut by the Federal Reserve have again become a major focus for investors, after the latest release of the CME FedWatch Tool showed a significant shift in the probability of a rate cut, which had previously strengthened. According to the latest CME data, the probability of a rate cut at the Fed's December meeting has dropped to around 41%, reflecting growing market skepticism after a series of US economic data, particularly the labor market, showed stronger-than-expected performance. This drop in probability contrasts with market optimism a few weeks earlier, which had seen the chance of a cut hovering around 60%.
Major financial institutions and global economists have also begun adjusting their forecasts. A Reuters survey showed that several major banks, such as J.P. Morgan and Morgan Stanley, have withdrawn their projections for a 25 basis point interest rate cut in December, citing the view that the Fed will wait for more convincing inflation signals before taking action. Meanwhile, a SIFMA survey revealed that around 75% of economists still expect at least one interest rate cut before the end of 2025, although the timing could potentially shift further into next year.
Although investors had previously hoped for a more dovish policy to curb borrowing costs and boost growth, current Fed officials continue to emphasize the need for a cautious approach to ensure inflation truly moves steadily toward its 2% target. This situation creates market uncertainty that directly impacts the movement of the US dollar, bonds, and commodities. The dollar tends to maintain its strength, while gold fluctuates due to its sensitivity to the interest rate outlook and safe-haven sentiment.
Financial markets are now awaiting the next batch of economic data—including the PCE report and consumer inflation—which will determine whether expectations for a rate cut will strengthen or weaken further. Many analysts believe that the coming weeks could be one of the most crucial periods for market direction until the end of the year.
Source: Newsmaker.id
