As the FOMC meeting kicks off, markets are focused on a likely rate cut and how it could possibly sway crypto market volatility.
Summary
- FOMC meets Dec. 9–10 to review U.S. economic data and monetary policy.
- Markets expect a 25-basis-point cut and updated dot plot projections.
- Crypto could move sharply; BTC may rise if the Fed signals dovish policy.
The Federal Open Market Committee will begin its December 2025 meeting today, Dec. 9, and will conclude tomorrow, Dec. 10. As the final meeting of the year, it has drawn significant market attention.
Investors will be watching the federal funds rate decision, the updated economic projections, and Chair Jerome Powell’s press conference for insights on inflation, labor-market conditions, and the direction of monetary policy heading into 2026.
Expected rate cut and economic projections
Markets are currently projecting an 80% to 92% probability of a 25-basis-point rate cut, which would lower the federal funds target range to 3.50%–3.75%. Such a move would represent the third consecutive reduction this year.
While a pause, or an unexpected increase, is viewed as unlikely, even a small departure from expectations could prompt swift market volatility.
In addition to the rate decision, the Federal Reserve will release its Summary of Economic Projections, including the closely followed dot plot. Analysts predict a gross domestic product growth of roughly 2.1%, an unemployment rate close to 4.2%, and core inflation of about 2.5%.
The dot plot will provide insight into policymakers’ outlook for 2026, with the consensus indicating three to four more rate cuts. Powell will give more details about the Fed’s outlook at his press conference on Dec. 10 at 2:30 p.m. ET. He is also expected to discuss the potential slowdown of quantitative tightening.
Potential crypto market reaction to FOMC meeting
Cryptocurrency markets, which tend to react sharply to shifts in U.S. monetary policy, are preparing for increased volatility. More than $1 billion in open positions may be at risk of liquidation depending on the Fed’s guidance.
Bitcoin is currently consolidating in the $90,500–$91,500 range, while Ethereum is trading around $3,100. If a confirmed 25-basis-point cut is paired with a dovish dot plot that predicts multiple reductions in 2026, market liquidity would likely increase.
In this scenario, Bitcoin could rise to between $92,000 and $95,000 and short liquidation cascades worth more than $120 million could occur, triggering more volatility.
On the other hand, a “hawkish cut” or an unexpected pause could result in profit-taking and a general risk-off attitude. This would drive Bitcoin towards the $88,000–$89,000 range and add pressure to altcoins, with Ethereum potentially falling below $3,000.
The market is still cautiously optimistic. While retail traders show increased anxiety, institutions continue to accumulate, indicating that if policy is in line with dovish expectations, dips may present buying opportunities.
