Is the December Cut Already Priced In?A Playbook for Trading the Next Fed Move.
The market has effectively accepted a December rate cut as a done deal. Fed funds futures, the shape of the curve, and rate-sensitive sectors all point to a high probability of a 25 bp move. The real mispricing isn’t in whether the Fed cuts, but in how far and how fast the easing cycle runs from here. A single “risk-management” cut is mostly in the price; a smooth, dovish glidepath through 2026 is not guaranteed. The right approach is to treat this as a hedging environment: harvest a bit of upside if the Fed leans dovish, but be paid if they disappoint and re-assert a higher-for-longer stance.