Expectations for the Federal Reserve’s final 2026 meeting are moving quickly after October inflation data surprised to the upside for a third straight month. Wall Street Journal chief economics correspondent Nick Timiraos reported that core inflation running at 3.7% annualized over the past three months has increased pressure for larger and faster rate hikes. Markets now price an 86.5% probability of a 25 basis point move in December and a 13.5% chance of 50 basis points on FedWatch, while Polymarket odds for a 50bps-or-more hike jumped from 0.6% on Monday to 11.4% on Wednesday.
Bank of America warned that a 50bps December hike is now a real risk, even though its base case remains a 25bps increase at the December 8–9 meeting. The bank estimates core PCE inflation at 3.3% against the Fed’s 2% target and called the October hold a possible policy mistake. Fed Governor Christopher Waller said he leaned toward 25bps but added that another 0.3% core CPI print would mean a 50bps hike 'should be considered.' Chicago Fed President Austan Goolsbee said all options remain on the table. Goldman Sachs revised its forecast to include 25bps hikes in both December and March 2027.
Bitcoin dropped to $72,727 after the CPI release, its lowest since August 20, and traded around $73,888 on Binance, down 0.6% in 24 hours. On the daily chart, BTC sits below the 50-day EMA at $78,897 and the 200-day EMA at $76,449. Support is at $72,727 and then $68,902; resistance starts at $75,599. Historical Fed hike data show bigger moves hit BTC harder: after six hikes of 50bps or more since 2022, Bitcoin was lower a week later five times with a median 6% drop, while 25bps hikes produced a median decline of only 0.6%.
The next major test is whether more Fed officials join Waller and Bank of America in signaling a 50bp move before the December 9 decision. If they do, Bitcoin may have to defend the $72,727 level.
