The United States will announce the Consumer Price Index (CPI) for November tonight, with the market focusing on its impact on whether the Federal Reserve (Fed) will cut interest rates. This data could become a key factor in determining whether the Fed will take action to lower rates in December or January next year. (Background: Tokyo CPI exceeded expectations, 'scaring the market' as the yen surged 120 points! Expectations for a rate hike in Japan in December are rising, be cautious of a repeat of the arbitrage liquidation chaos.) (Additional context: Japan's CPI is higher than expected; will there be a rate hike in December? Be careful of a repeat of the hot money withdrawal from yen arbitrage trading that caused the stock market crash in August.) Bitcoin is currently recovering to the $98,000 level, and whether it can regain the $100,000 mark is highly anticipated. The CPI data released by the U.S. at 9:30 PM tonight could influence whether the Federal Reserve will cut rates again by the end of this year or in January next year, and the market is reminded of the potential for increased volatility risk. Core indicator of rate cut expectations: CPI data The market currently estimates that the year-on-year CPI growth rate for the U.S. in November will be 2.7%, slightly higher than October's 2.6%. If the latest data can prove that inflation is further slowing, it will enhance the market's confidence in the Fed cutting rates. According to Morgan Stanley's analysis, the Fed may cut rates by 0.25 percentage points in December and January next year. Additionally, the federal funds futures market has been active recently, with January and February contract trading volumes hitting new highs, indicating that investors' expectations for a rate cut have significantly increased. The current market estimates that the probability of the Fed cutting rates by 0.2 percentage points in December has reached 80%, a notable increase from last month's 64%. The probability of a 25 basis point rate cut has risen to 86.1%. According to CME's FedWatch tool, the market's prediction probability for the Fed to cut rates by 25 basis points in December has risen to 86.1%, while the probability of choosing to pause rate cuts is only 13.9%. Against the backdrop of major central banks' policies about to be announced globally, the risk of market volatility is increasing, and investors need to pay close attention to related developments. Source: FedWatch Tool Early positioning for rate cut opportunities Morgan Stanley strategist Matthew Hornbach even advised investors to position themselves early, especially focusing on the Federal Open Market Committee (FOMC) meeting on December 18. He suggested buying February federal funds futures contracts or adopting overnight index swap (OIS) rate strategies related to the January meeting. Furthermore, last week's unexpectedly weak employment data has further boosted market expectations for a rate cut in December. Financial market analyst Kyle Rodda stated: "If tonight's CPI data meets market expectations, it will open the green light for the Fed to cut rates, and it could even become a new catalyst for the gold market." Next week's focus on U.S.-Japan central bank dynamics Next week is a super central bank week, with major central banks including the U.S., the U.K., and Japan holding intensive decision-making meetings, with the decisions of the U.S. Fed and Japan's central bank drawing the most attention. Currently, the U.S. benchmark interest rate is 4.75%, Japan's is 0.25%, and the U.K. is also at 4.75%. If the U.S. cuts rates and Japan decides to raise rates the next day, it could trigger volatility in the international market, reminiscent of the August yen arbitrage liquidation surge, so users should be cautious of the risks. Meiji Yasuda Research Institute economist Yuichi Kodama pointed out: "The probability of the Bank of Japan raising rates in December has exceeded 50%, but the appreciation of the yen may delay the rate hike until January next year." Related reports Tokyo CPI exceeded expectations, 'scaring the market' as the yen surged 120 points! Expectations for a rate hike in Japan in December are rising; be cautious of a repeat of the arbitrage liquidation chaos. Japan's CPI is higher than expected; will there be a rate hike in December? Be careful of a repeat of hot money withdrawal from yen arbitrage trading that caused the stock market crash in August. CPI inflation is under control. Bitcoin plunged $5,000 after breaking through $93,000, with over 250,000 people liquidated in a double whammy of long and short positions. Volatility warning: U.S. CPI is about to hit hard; will it open the green light for the Fed's rate cut in December? This article was first published on BlockTempo (the most influential blockchain news media).