Inflation in the United States could ease again, with real-time Truflation data pointing to a 2.45% annualized print ahead of the next FOMC decision. While the official CPI reading remains close to 3% – highlighting a clear cooling trend ahead of the FOMC meeting in five days.
The timing here is interesting, especially since the Fed also ended quantitative tightening (QT) on December 1, 2025.
Bitcoin, in turn, has already responded with a sharp upward move. In fact, the timing puts Bitcoin in a familiar position, leading policy expectations as the market looks for clarity on cuts and the direction of liquidity.
QT shutdown changes the liquidity background
The Fed’s balance sheet tells the second half of this story. Total assets peaked at nearly $8.97 trillion in 2022. The most recent WALCL value on December 3 placed assets near $6.54 trillion – reflecting approximately $2.43 trillion in cumulative withdrawals during the second quarter.
In November alone, there were outflows of approximately $37 billion, even as the Standing Repo Facility was reset.
That zero SRF print could be a sign of calm money markets. It could also support the view that the Fed can pause its balance sheet contraction without causing stress.
QT officially ended on December 1st. Mechanical liquidity drainage has stopped, even though quantitative easing has not yet started.
How did Bitcoin’s price react?
On the 4-hour chart, Bitcoin’s price rose about 12.6% from the post-QT low, rising from $83.5k to the $93k-$94k band. Market bulls defended the $90.9k area as short-term support after the initial push, while sellers continued to limit momentum near the most recent local highs.
Source: TradingView
At the time of writing, the world’s largest cryptocurrency appeared to be trading within a tight range – one that emphasized macro hesitation rather than outright technical weakness.
The chances of interest rate cuts sharpen the position
Finally, according to CME’s FedWatch tool, the probability of a 25 basis point cut has now risen to 87.2%. Moreover, only 12.8% of traders expect the Fed to leave interest rates unchanged.
If these cuts happen and inflation continues to cool, BTC could see price conditions loosen in the first and second quarters of 2026. If the Fed pushes back, the recent 12% decline threatens to turn into deeper consolidation.
Final thoughts
- Truflation data showed annual inflation of 2.45%, up from 2.7% in November, while the BLS CPI value on the widget was almost 3.0%.
- The QT ended on December 1 with BTC rising about 12% from the post-QT low as traders priced in softer policy through 2026.