Fed Futures Are Saying One Thing Loud and Clear About Next Week’s Meeting
Here’s what the Fed Funds futures market is pricing in as of December 6, 2025
As we head into the December 10, 2025 Federal Reserve meeting, the interest-rate market is delivering an unmistakable message:
👉 A rate cut is overwhelmingly expected — and the probability of a hike is effectively zero.
Here’s what the Fed Funds futures market is pricing in as of December 6, 2025
🎯 Current Target Rate: 375–400 bps
The futures market is projecting two possible outcomes next week:
1. A rate cut to 350–375 bps — Probability: 86.2%
This is the dominant scenario. Traders are signaling that the Fed has enough confidence in inflation progress and economic stability to begin nudging policy toward easing.
An 86% implied probability is not subtle — it means market participants are almost certain that the next move is down.
2. No Rate Change (Stay at 375–400 bps) — Probability: 13.8%
The only alternative scenario priced with any meaningful probability is a “hold.”
But at just 13.8%, this reflects more of a “tail-risk” hedge than an actual expectation of Fed hesitation.
3. Rate Hike Scenario — Probability: 0.0%
Not on the table.
Not even theoretically.
The market is saying: a hike is dead.
📊 How the probabilities have shifted
Compared to prior periods:
ScenarioNow1 Day Ago1 Week Ago1 Month Ago350–375 (Cut)86.2%86.2%86.4%69.6%375–400 (Hold)13.8%13.8%13.6%30.4%
The story here:
Over the past month, the cut probability climbed from ~70% to 86%.
The “hold” probability has slid from 30% to 13%.
This shift reflects a steady stream of softer inflation readings, moderating labor-market data, and Fed commentary pointing toward an easing cycle in 2026.
🧠 What this means for investors
1. Bonds likely continue pricing a friendly rate path
Cuts mean lower yields — and lower yields mean higher bond prices.
This supports positions in:
Intermediate-term Treasuries
Investment-grade credit
Bond-heavy diversified portfolios
The market is already front-running this move.
2. Equities may welcome the easing cycle — but with nuance
Historically, early-cycle cuts can be bullish if they are driven by cooling inflation rather than recession fears.
Right now, the data leans toward the “soft landing” narrative.
Growth sectors (tech, communication services) often perform strongly in this environment.
3. Cash holders may be near peak yield
If this cut happens — and more follow — money-market yields will drift lower in 2026.
This is often the moment when long-term allocators lock in bond yields before they compress.
📌 Bottom Line for Grow Your Pile Readers
The futures market is shouting a very clear message:
The Fed is likely cutting rates next week, and the easing cycle may be underway.
Investors should recognize what the market is already pricing:
Lower rates ahead, a friendlier bond environment, and a shift in the macro winds that will shape 2026 portfolio decisions.
If anything changes in the final days leading into the meeting, we’ll update you with a fast macro breakdown.
