What happens if the Fed cuts rates before Christmas Eve?

A pre-Christmas Fed rate cut could boost spending, shift bond yields, lift risk assets and increase demand for crypto.

The Fed’s Dec. 9-10 meeting carries unusual weight as markets wait to see whether another rate cut will arrive before Christmas, shaping bonds, equities and crypto.

After two cuts in 2025, rates now sit at 3.75%-4.00%. Labor weakness and softer inflation support further easing, but officials remain divided because inflation risks have not fully cleared.

A cooling job market, easing inflation and the end of quantitative tightening could justify another reduction and align with year-end liquidity needs.

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