Escalating bets on tighter Federal Reserve policy are dominating crypto markets after October inflation surprised to the upside. Polymarket traders on Nov. 10 assigned an 85% probability to a quarter-point rate hike at the Fed's December meeting, with a separate contract pricing a 12.7% chance of a larger move. Combined, the platform now implies about a 97.7% probability that the central bank tightens policy next month.
The repricing follows the Bureau of Labor Statistics report showing consumer prices rose 0.4% in October, above the 0.3% forecast, while core inflation excluding food and energy climbed 0.3% for a third consecutive month. Shelter costs accounted for more than 30% of the headline gain, with food prices up 0.5% and energy up 0.7%. Annual comparisons were unavailable because the October 2025 government shutdown interrupted collection of comparison data.
Federal Reserve Governor Christopher Waller had already said in a London speech that he would back a December quarter-point increase even if inflation improved. He also warned that a monthly core CPI reading at or above 0.3% could justify a half-point move. The hot core print keeps that scenario alive. A 50-basis-point hike would represent two standard quarter-point steps delivered in one meeting and would signal the Fed's priority remains controlling inflation rather than easing financial conditions.
CME FedWatch now shows roughly a 90% chance of a quarter-point hike and a 10% chance of a half-point move. A Reuters survey conducted Nov. 6–10 found all 101 economists expected a quarter-point hike to a 4%–4.25% target range. The Fed's final policy meeting of 2026 is scheduled for Dec. 8–9, while the next CPI report lands Dec. 10, after the decision.
Geopolitical developments added another variable. President Donald Trump told reporters the Iran War is “militarily effectively over,” saying negotiations were moving positively after meeting Qatar's prime minister. Brent crude fell another 1.7% to about $90.99 after a 5.85% overnight drop, easing some energy-driven inflation concerns. However, markets are still weighing whether cheaper oil can offset stubborn core inflation and aggressive Fed expectations.
In crypto-specific policy speculation, Kalshi traders raised the odds of a U.S. Treasury Bitcoin purchase this year to 13%, reflecting renewed attention on direct government BTC accumulation. Bitcoin traded near $74,541, down 0.2% over 24 hours and 3.9% over seven days, with a daily range of $73,586.83 to $75,476.89. Higher rate expectations generally pressure speculative assets by making cash and yield-bearing instruments more attractive.
