New York Fed President John Williams has reopened the door to a “near-term” rate cut, putting fresh pressure on a divided Federal Reserve.
Why it matters: the December 9-10 FOMC meeting is now the biggest macro swing point for Bitcoin and risk assets heading into year-end.
Williams Signals a Possible Shift Ahead of the December FOMC
In prepared remarks for a speech in Santiago, Williams said monetary policy remains “modestly restrictive” and suggested there’s room to ease if needed.
He pointed to rising employment risks and easing inflation pressures, which is a stance that runs counter to the Fed’s more cautious members.
“I still see room for a further adjustment in the near term… to move the stance of policy closer to the range of neutral,” he said.
Williams also downplayed concerns about tariff-driven inflation, saying there’s no sign of “second-round effects.” He expects inflation to trend toward 2% by 2027.
But not everyone at the Fed agrees. Some policymakers have already pushed back on another cut after September and October’s back-to-back moves, and Chair Jerome Powell has warned that December is “not a foregone conclusion.”
The CME Fedwatch tool displays a current 64.4% probability of a cut.
Morgan Stanley Scraps Its December Cut Call
Morgan Stanley, which manages $1.3 trillion, now expects no December cut after a stronger-than-expected rebound in U.S. hiring. September payrolls jumped by +119k, with gains across both goods and services. The firm said the small rise in unemployment to 4.4% came from more people joining the labor force, not layoffs.
The bank now sees the first cuts arriving January, April, and June 2026, a sharp break from expectations earlier in the fall.
What It Means for Crypto Markets
A split Fed is usually a recipe for volatility. If the central bank leans dovish, liquidity tends to move back into Bitcoin, ETH, and high-beta altcoins. If December turns into a pause, the market could see tighter conditions and sharper swings.
What to Watch Next
Powell’s next public remarks, and any shift in December odds, will likely set the tone for crypto volatility heading into the final FOMC meeting of 2025.
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