Key Takeaways
- • CME Group's FedWatch tool shows December Fed rate-hike odds at 84%, with fed funds futures pricing a hold at just 15.6% and a hike to 4.00%-4.25% at 84.4%.
- • US spot Bitcoin ETFs shed $1.28 billion last week, the largest weekly outflow since late June, per SoSoValue, pushing 2026 net flows to roughly negative $914 million.
- • The October jobs report showed 165,000 new positions versus forecasts of 65,000, with unemployment falling to 4.1%, lifting hike odds from about 77% to 84%.
- • The 10-year Treasury yield held near 4.9% and the two-year near 4.5%, above the Fed's current 3.75%-4.00% range, raising the opportunity cost of holding non-yielding Bitcoin.
- • The October CPI release on Tuesday at 8:30 a.m. ET and remarks from Fed Governor Christopher Waller are the next catalysts for December pricing.
Summary
Fed rate-hike odds for December have climbed to 84%, according to CME Group's FedWatch tool, which derives its probabilities from fed funds futures. Those contracts price a hold at just 15.6%, against 84.4% for a hike that would lift the policy rate to 4.00%-4.25%. Futures also price about 50 basis points of hikes through December 2027 and assign no probability to a cut, according to CME FedWatch.
The repricing follows the Federal Reserve's decision to hold rates at 3.75%-4.00% on October 28, when two officials dissented in favor of a hike. The October jobs report then showed 165,000 new positions against forecasts of 65,000, and the unemployment rate fell to 4.1%. Hike odds rose to roughly 77% after the data. Equities rebounded Monday after a tech sell-off, with the S&P 500 gaining 2.35% and the VIX falling 22%. Oil also declined on a reported US-Iran Hormuz deal, which typically eases inflation pressure, yet hike odds climbed further to 84% on Tuesday. The 10-year Treasury yield held near 4.9%, and the two-year yield sits near 4.5%, above the top of the current Fed range.
The move is weighing on digital assets. US spot Bitcoin ETFs shed $1.28 billion last week, the largest weekly total since late June, according to data tracker SoSoValue. Those outflows pushed 2026 net flows to about negative $914 million. BeInCrypto notes that a higher policy rate raises the opportunity cost of holding Bitcoin, which pays no yield, and that ETF flows suggest institutions are already weighing that trade-off against Treasury yields near 4.9%.
Chicago Fed President Austan Goolsbee has said officials missed on inflation, and Fed Governor Christopher Waller speaks Tuesday, offering traders another read on December. The October Consumer Price Index arrives Tuesday at 8:30 a.m. Eastern Time as one of several key US data releases this week. A hot print could harden December pricing, while a soft one could pull odds well below 50%, which would weaken the bearish read on Bitcoin. A December hike would lift the policy rate to 4.00%-4.25%.
The repricing follows the Federal Reserve's decision to hold rates at 3.75%-4.00% on October 28, when two officials dissented in favor of a hike. The October jobs report then showed 165,000 new positions against forecasts of 65,000, and the unemployment rate fell to 4.1%. Hike odds rose to roughly 77% after the data. Equities rebounded Monday after a tech sell-off, with the S&P 500 gaining 2.35% and the VIX falling 22%. Oil also declined on a reported US-Iran Hormuz deal, which typically eases inflation pressure, yet hike odds climbed further to 84% on Tuesday. The 10-year Treasury yield held near 4.9%, and the two-year yield sits near 4.5%, above the top of the current Fed range.
The move is weighing on digital assets. US spot Bitcoin ETFs shed $1.28 billion last week, the largest weekly total since late June, according to data tracker SoSoValue. Those outflows pushed 2026 net flows to about negative $914 million. BeInCrypto notes that a higher policy rate raises the opportunity cost of holding Bitcoin, which pays no yield, and that ETF flows suggest institutions are already weighing that trade-off against Treasury yields near 4.9%.
Chicago Fed President Austan Goolsbee has said officials missed on inflation, and Fed Governor Christopher Waller speaks Tuesday, offering traders another read on December. The October Consumer Price Index arrives Tuesday at 8:30 a.m. Eastern Time as one of several key US data releases this week. A hot print could harden December pricing, while a soft one could pull odds well below 50%, which would weaken the bearish read on Bitcoin. A December hike would lift the policy rate to 4.00%-4.25%.
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