Markets Price 100% Chance of December Fed Hike Before CPI

Interest-rate futures markets priced a 100% chance of a Federal Reserve rate increase in December ahead of the October inflation report, signaling expectations for tighter policy across risk assets.

In the Nov. 10 outlook, a quarter-point increase carried a 98.9% probability, while a half-point move accounted for the remaining 1.1%. The market pricing assigned no probability to the Fed leaving rates unchanged. These figures reflect expectations, not a Fed decision.

The outlook also pointed to further increases by January. Markets priced a 64.9% chance of a cumulative quarter-point increase by then and a 34.8% chance of a cumulative half-point increase. The probability of no change by January was 0%.

That shifts attention toward the potential pace and size of rate increases after December. Fed policy matters to crypto and other risk assets because interest rates affect the cost of borrowing and the returns investors demand for taking risk.