Key Takeaways
- The market is expecting two more Fed rate cuts this year.
- The Federal reserve is anticipated to reduce interest rates by 0.25% in the October FOMC meeting.
- Further, experts eye another reduction in December 2025, which aligns with Wells Fargo’s prediction of two more rate cuts.
The financial market is sending signals of almost unanimous belief that the U.S Federal Reserve will announce another interest rate cut at its October 28-29 policy meeting. The traders are pricing in over 90% probability of a 25-basis-point Fed rate cut, an indication that monetary easing is no longer a matter of whether but of how much and how soon. The change is against the background of increasing evidence of a slowing economy, deteriorating employment situation, and moderate but showing the possibility of moderating inflation.
Fed Rate Cut Odds Surge
The CME FedWatch Tool indicates that as of October 9, 2025, 94.1% participants are betting that the Fed will reduce its key interest rate to a range of 3.75% to 4.00%. Meanwhile, nearly 6% of the futures market expects a Fed rate pause wherein the regulator is anticipated to keep the current 4-4.25% rates steady.
Whilst, they market also expect another cut by December which is in tandem with expectations by prominent players like Wells Fargo who forecast two more cuts ahead of the year-end. The trends are supporting these expectations as there has been a fast decay of the labor market statistics and the central bank has become more dovish in its communication.
The U.S economy’s performance is recorded to be slowing down as of late. The data shows that only 22,000 new jobs were registered during August payrolls and that is very low when compared to previous months, and the unemployment rate increased to 4.3% as of August, the highest since 2021.
The ongoing political interference by the government shutdown has also caused additional distortion of jobless claims, raising fears that the labour strength of the post-pandemic period is becoming weak. Meanwhile, inflation remains sheltered partly above the 2% asset of the Fed, and the Consumer Price Index (CPI) increased 2.9% year-on-year in August whereas the PCE price index stood at 2.7%.
Other Key Economic Data For the U.S.
The economic growth is also on the lower trend. Following a growth rate of 3.8% in the second quarter, the GDP forecasts for the fourth quarter of 2025 have been decreased to 1.2%. These indicators of a slow down activity have reinforced the argument of taking further and more aggressive action in easing monetary policies as the Fed tries to cushion the economy without stoking up the inflationary spur.
The September meeting of FOMC was the first to have reduced the federal funds rate; it was cut to 4.00%-4.25%. According to meeting minutes, policymakers have now begun walking the fine line between the danger of underspending inflation and the mounting danger of labor market feebleness. Referencing the September move, officials explained that it was a precautionary measure that was meant to maintain the momentum in hiring and spending.
How Will Bitcoin, Altcoins React?
Reactions in the market are fast. The treasury yields are low and this implies that the cost of borrowing will decrease, and the U.S dollar has weakened against major peers. Stocks and risk investments have been positively reacting to the lightening perspective. Bitcoin and major altcoins have demonstrated a new vitality in the digital asset arena and traders are speculating that lower liquidity levels and lower yields will trigger the crypto boom once again.
With investors rebalancing portfolios to a looser monetary environment, the October meeting is now to be watched as the next move by the Fed could signal the direction of international risk assets as well as digital currencies. Currently, Bitcoin price is consolidating around $121,000 and the chart shows red flags, which could lead to a downfall.
However, a dovish stance from the Fed could push the BTC price to new highs. Moreover, altcoins could follow suit as investors’ risk appetite would grow as borrowing costs will be much lower.
Also Read: Bitcoin Bull Run In Trouble, Risks Nosedive to $116.5K
