Odds of Fed December Rate Rise Reach 84% as Bitcoin Funds Lose $1.28B

The odds of a Federal Reserve rate hike in December reached 84%, per the CME Group’s FedWatch tracker. Spot bitcoin funds in the US lost $1.28 billion over the preceding seven days.

This probability stems from fed funds futures contracts. Current pricing assigns a 15.6% chance to holding the rate and an 84.4% chance of a rise to a range of 4.00% to 4.25%. According to SoSoValue, the ETF redemptions represent the largest weekly sum logged since the tail end of June.

What Explains Rising Odds of a Fed Hike Amid an Equity Rebound?

On October 28, the central bank maintained its target range of 3.75% to 4.00%, although a pair of policymakers broke ranks to vote for an increase.

Afterwards, the October employment figures arrived, exceeding expectations with 165,000 roles added versus a predicted 65,000. The jobless rate dipped to 4.1%.

Following this release, the chances of a rate move climbed to around 77%.

Monday’s stock trading saw a recovery following a technology-driven downturn. The S&P 500 advanced 2.35%, and the VIX volatility index dropped by 22%. The return on the 10-year Treasury note, however, persisted near the 4.9% mark.

Crude prices declined, reportedly due to a US agreement with Iran concerning the Strait of Hormuz, a development that generally reduces upward pressure on inflation. Despite this, the probability of a Fed hike increased further, reaching 84% by Tuesday.

Is a Bitcoin Demand Recovery Possible Following a Fed Rate Increase?

A federal rate increase heightens the alternative cost of possessing a non-yielding asset like Bitcoin. The recent movement of capital out of ETFs indicates that institutional players are evaluating this exchange right now.

These withdrawals drove cumulative net inflows for 2026 to an approximate negative $914 million, based on SoSoValue’s figures.

The rate on the two-year Treasury note is close to 4.5%, which exceeds the highest point of the Fed’s existing rate corridor. CME FedWatch data reveals that futures markets are pricing in roughly 50 basis points of cumulative increases spanning up to December 2027. No reduction in the rate is factored into these futures projections.

Austan Goolsbee, President of the Chicago Fed, has said that the central bank's forecasts on inflation proved inaccurate. Governor Christopher Waller is set to speak on Tuesday, providing traders with another view on the decision due in December.

The October CPI data is set for release on Tuesday at 8:30 a.m. Eastern Time. It ranks among a series of significant economic reports from the US this week.

A high inflation reading would likely lock in the current December pricing. A soft report, conversely, could push the odds well below 50%, challenging the current bearish outlook.

A December hike would shift the policy rate into the 4.00% to 4.25% range. Bitcoin would find itself competing for capital against Treasury offers of roughly 4.9%.