Markets Bet on Fed Rate Cut in October
Markets now price in an 89.8% chance of a Fed rate cut to 3.75–4.00% at the October meeting.
- Fed likely to cut rates at October 29 meeting
- Market odds of rate cut rise to 89.8%
- Investors expect policy shift amid economic signals
Market Confidence Grows Around October Fed Rate Cut
Investors are nearly certain that the Federal Reserve will lower interest rates at its next policy meeting on October 29, 2025. According to the latest data from futures markets, there’s now an 89.8% probability that the Fed will cut the federal funds rate to a range of 3.75%–4.00%. This growing confidence reflects changing economic signals and evolving expectations around inflation and growth.
Why the Market Expects a Rate Cut
The surge in expectations comes as economic indicators show slowing growth and moderate inflation. With inflation trending closer to the Fed’s 2% target and job gains cooling, markets believe the central bank has room to ease monetary policy. This would mark a shift from the Fed’s previous stance of holding rates higher for longer to tame inflation.
A rate cut in October would be the first since the tightening cycle began in 2022, signaling a potential pivot toward a more supportive stance for markets and the broader economy.
What This Means for Investors
If the Fed follows through, a lower rate environment could boost equity markets, ease borrowing costs, and support risk-on assets like cryptocurrencies. Bond yields may decline, and the U.S. dollar could weaken slightly, increasing the appeal of alternative assets.
Traders are now adjusting their portfolios in anticipation of the move, with rate-sensitive sectors like tech, real estate, and crypto likely to benefit.
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