The market is already betting on it.

CME FedWatch data shows the probability of a rate cut in December has soared to nearly 87%. Morgan Stanley even overturned its previous forecast of a cut in 2026 overnight, now believing there will be a 25 basis point cut this month, with the rate range possibly dropping to 3.75%-4%.

But the problem is—the Fed itself has no unified stance.

**Doves are anxious: If rates don’t drop now, the job market is doomed**

Fed Governor Mester fired the first shot: high interest rates are destroying jobs. New York Fed President Williams followed suit, emphasizing the need for swift action to prevent a labor market collapse.

San Francisco Fed President Daly was even harsher: once employment collapses, there’s no way to recover. Inflation rebounds might still be manageable, but a higher unemployment rate is a bottomless pit.

**Hawks won’t budge: Inflation isn’t dead yet**

Four voting members have publicly opposed further rate cuts. Their logic is simple—price pressures are spreading from goods to services, and loosening policy now would mean throwing away all previous efforts.

Boston Fed President Collins has made a dramatic shift. She previously supported easing, but now warns: cutting rates is like letting the tiger out of its cage.

**The market doesn’t care, liquidity expectations are already surging**

Rising expectations of rate cuts have historically fueled risk assets. The crypto market is especially sensitive to this. For mainstream coins like Bitcoin, Ethereum, and Dogecoin, once the liquidity floodgates open, volatility usually intensifies.

But don’t forget the other possibility—if inflation data suddenly rebounds and the Fed is forced to slam on the brakes, the market could experience a sharp correction.

**The December meeting is destined to be anything but calm**

On one side is the alarm of weak employment data, on the other is the looming threat of resurging inflation. The Fed has to walk a tightrope between two cliffs.

The market is ready to party. But policymakers are still fighting.

Do you think the rate cut will go through as expected? Or will there be a surprise?