December Cut Expectations Gain Momentum
Expectations for a Federal Reserve rate cut in December have strengthened sharply as the next policy meeting approaches. Across prediction markets and rate-tracking tools, traders are increasingly aligned around one outcome: a 25-basis-point reduction in the benchmark rate. What was recently a cautious assumption has now become the dominant market view.
On Polymarket, the main contract tied to a December 25 bps cut rose from 66% five days earlier to 84%. On related markets tracking the possibility of dissent within the Federal Open Market Committee, a 25-basis-point cut was priced at 63% if there are two or more dissents, and near 60% if there are two or fewer. By contrast, the probability of no change has fallen into a 12% to 16% range.
Consensus Builds Across Platforms
Kalshi is showing nearly the same conviction. The platform priced the odds of a 0.25 percentage point cut at 84%, while assigning only 18% to the chance that rates remain unchanged. Larger-than-standard easing moves appear to be little more than statistical outliers in current pricing.
CME’s FedWatch Tool adds further support to that narrative. For the December 10 policy meeting, FedWatch shows an 84.9% probability that the target range will be lowered from the current 375–400 basis points to 350–375 basis points. Only 15.1% of the weighting supports rates staying where they are. That marks a notable increase from the 71% level seen a week earlier.
Traders Are Leaning Toward a Modest Easing Move
The alignment across Polymarket, Kalshi, and CME FedWatch sends a clear message: despite months of mixed macro signals and cautious policymaker messaging, traders now broadly expect the Fed to deliver a modest rate cut. Whether the central bank ultimately matches those expectations remains to be seen, but current market pricing suggests investors have already made an early and confident call that a December quarter-point cut is the most likely outcome.