Fed December Rate Cut Expectations & Market Reactions: Analysis of Daly's Comments and Reddit Discussions

On November 24, 2025 UTC, a Reddit thread discussed San Francisco Fed President Mary Daly’s surprise support for a December rate cut, with user claims about rate cut probability (81%), impact on AI investments vs. jobs, AI bubble risks, and panic sell-off opportunities. Subsequent tool analysis confirms Daly’s support, a surge in rate cut probability to ~85% (CME FedWatch), and positive market reactions (US indices up, Bitcoin rebounding).

a.

: Non-voting FOMC member Mary Daly expressed support for a December rate cut, citing labor market concerns. Her alignment with Fed Chair Jerome Powell (rare public agreement) signals potential consensus for a cut [1,2].
b. : CME FedWatch Tool shows an 83–85% chance of a 25-basis-point December rate cut (up from ~30% a week earlier) [3,4].
c. : US indices (S&P500, Nasdaq, Dow) rose for 4 consecutive days (Nov21–26) as expectations surged [5,4]. Bitcoin rebounded above $90k [3].
d. : Users debated: (i) rate cuts boosting AI investments over jobs; (ii) AI bubble risks; (iii) panic sell-offs as buying opportunities (no external verification) [6].

• Context of Daly’s Comments
  : Daly’s support is significant because she rarely opposes Powell publicly, hence the market’s strong reaction [1]. Her comments followed easing inflation data (September PPI), which reinforced rate cut arguments [1].
• Sentiment Shift
  : The 55-point jump in FedWatch probability (from ~30% to ~85% in a week) reflects a major shift in investor sentiment toward accommodative policy [3].
• Market Logic
  : Positive index moves (Nasdaq +3.33% over 4 days) reflect optimism about lower borrowing costs supporting tech and growth sectors [5]. The Reddit AI-related claims remain speculative—no tool data supports or refutes them [6].
• Non-Voting Status
  : While Daly is not a voting FOMC member, her alignment with Powell suggests the chair may seek consensus for a cut [1].

a.

:

• US Indices: S&P500 (+0.28%), Nasdaq (+0.22%) on Nov26; 4-day gains: S&P (+2.06%), Nasdaq (+3.33%) [5].
• Bitcoin: Rebounded above $90k as risk sentiment improved [3].
  b.
  Sector Implications
  :
• Rate-sensitive sectors (tech, housing) will benefit most from lower borrowing costs [1,3].
  c.
  Future Risks
  :
• If the Fed does not cut rates in December, markets may correct sharply (given high expectations) [4].
• If the cut happens, it could extend the current rally but may fuel concerns about overheating in risk assets [3].

• Timeline
  : Daly’s comments (Nov24) followed September PPI data (easing inflation) and an uptick in unemployment, which supported rate cut arguments [1].
• Probability Surge
  : FedWatch probabilities rose from ~30% (Nov19) to ~85% (Nov26) [3,4].
• Market Consistency
  : Indices rose consistently after Nov20, when rate cut expectations started to build [5].

a.

: No external data supports/refutes Reddit users’ claims about rate cuts boosting AI investments over jobs or AI bubble risks [6].
b. : No evidence of impending panic sell-offs (markets are up, not down) [5].
c. : Lack of granular data on how rate cuts will impact non-tech/housing sectors (e.g., energy, utilities).
d. : No data on whether voting FOMC members share Daly’s views (only non-voting members’ comments are available).

[1] The Mortgage Point. “Fed Rate Cut in December May Be More Likely as Officials Signal Support”. Nov26,2025. https://themortgagepoint.com/2025/11/26/fed-rate-cut-in-december-may-be-more-likely-as-key-officials-signal-support/
[2] Reuters. “Stocks, bitcoin edge up as investors bank on Fed rate cuts”. Nov27,2025. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-11-27/
[3] AInvest. “Capitalizing on the Fed’s December 2025 Rate-Cut Cycle”. Nov26,2025. https://www.ainvest.com/news/capitalizing-fed-december-2025-rate-cut-cycle-strategic-positioning-equities-bitcoin-2511/
[4] CommBank. “Wall Street ends higher on growing bets for Fed rate cut”. Nov27,2025. https://www.commbank.com.au/articles/newsroom/2025/11/wall-street-ends-higher-on-growing-bets-for-fed-rate-cut.html
[5] Market Indices Data (^GSPC, ^IXIC, ^DJI, ^RUT). Nov20-26,2025. Retrieved Nov27,2025 UTC.
[6] Original Reddit Event. “Fed Daly Just Dropped a Bomb… December Rate Cut Back on the Table?”. Nov24,2025 UTC. User-provided.
[7] Pintu News. “Odds of December Fed Rate Cut Jumps to 85% After PPI Data Release”. Nov27,2025. https://pintu.co.id/en/news/233270-odds-of-december-fed-rate-cut-jumps-to-85-after-ppi-data-release

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Disclaimer: This report is for informational purposes only and does not constitute investment advice.
Analysis based on publicly available data as of Nov27,2025 UTC.
Unverified claims from Reddit are clearly marked and not endorsed.