A December Fed hike is now near-certain as the dollar hits a 19-month high

CME FedWatch puts an 88.5% chance on a 25-basis-point December hike and 11.5% on a 50-basis-point move, the dollar closed Friday at its highest since April 2025, and bitcoin slid to an intraday low of $65,020.

The hike is fully priced

Futures traders assign an 88.5% probability to the Federal Reserve lifting its benchmark rate by 25 basis points at its Dec. 8-9 meeting, and 11.5% to a larger 50-basis-point increase, according to the CME FedWatch tool. No probability is assigned to unchanged rates or cuts. On Nov. 6, the tool assigned a 23.7% probability to unchanged rates and 76.3% to a quarter-point increase.

The current federal funds target range stands at 3.75% to 4%. A quarter-point increase would raise that range to 4% to 4.25%, while a half-point move would place borrowing costs between 4.25% and 4.5%. Kalshi traders priced a 25-basis-point hike at 89% and a larger increase at 10%, while Polymarket put the figures at 88% and about 9%.

Why the odds moved

October's consumer price index increased 0.4%, exceeding the 0.3% forecast, while core inflation advanced 0.3%. It was the third consecutive month of gains of at least 0.4%. October payrolls rose by 165,000, comfortably above expectations near 65,000. Producer prices rose 6.5% from a year earlier in October, the highest since November 2022.

Federal Reserve Governor Christopher Waller said the central bank should consider a 50-basis-point hike if core inflation came in at or above 0.3%. Boston Fed President Susan Collins said on Saturday that a steady, gradual path of modest increases is appropriate, while noting the path of rates over the next year might be a bit higher than she had thought. The Fed last raised rates in September, and most officials have signaled another increase in January after December.

The dollar's week, bitcoin's slide

Traders are now fully pricing in a 25-basis-point rate hike in December, versus a 74% chance last week, Reuters reported. In response, the dollar hit a 19-month high against a basket of major currencies and was on track for its best week in two months. The dollar index closed Friday near 103.4, its highest since April 2025.

Bitcoin touched $65,020 on Bitstamp on Saturday morning, falling from $72,128 before recovering modestly to $65,274 around 11:14 a.m. Eastern time. The intraday low brought $1 billion in 24-hour liquidations across the crypto market, with $382 million in bitcoin positions wiped out. Bitcoin has fallen about 14% over the past week and is trading at its weakest since mid-August.

Sources

• Reuters, 2026-11-14
• CME Group, 2026-11-10