CME latest observation data just released, and once again a new market expectation reshuffle.

According to the Federal Reserve observation data on December 22, the probability of the Federal Reserve maintaining interest rates in January next year has soared to 79%, with only a 21% chance of a 25 basis point cut. Compared to the previous market expectation of a loosening cycle, this number is clearly a cold shower— the interest rate cut fantasy is basically shattered.

Looking further ahead, the game in March becomes interesting. The probabilities of holding steady and cutting interest rates by 25 basis points are almost evenly matched (43.6% and 46.9%), and the probability of a large 50 basis point cut is even less than 10%. This indicates that the Fed’s stance has become quite clear—very cautious.

Why so cautious? It’s nothing more than inflation data still above the 2% target, the labor market also performing steadily, plus the uncertainty brought by Trump’s policies, prompting Powell’s team to choose to wait and see.

How much impact does this have on the crypto circle? Looking back to last month when the Fed did cut rates, Bitcoin surged and then fell back, with over $300 million in liquidation within 24 hours. Now, as the expectation of a rate pause grows stronger, funds will definitely need to reconsider their positions. Will BTC, ETH, and other mainstream coins experience another round of volatility? The key will be the official statements from the Federal Reserve in the coming weeks.