Inflation in the United States might be easing up again, with real-time Truflation data highlighting a 2.45% YoY print ahead of the next FOMC decision. All while official CPI’s 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) as of 01 December 2025.
Bitcoin, for its part, has already reacted to the same with a sharp upside move too. In fact, the timing places Bitcoin in a familiar position, front-running policy expectations as the market hunts for clarity on cuts and liquidity direction.
QT shutdown changes the liquidity backdrop
The Fed’s balance sheet tells the second half of this story. Total assets peaked near $8.97 trillion in 2022. The most recent WALCL reading from 03 December placed assets near $6.54 trillion – Reflecting about $2.43 trillion in cumulative drawdowns through QT2.
November alone saw roughly $37 billion in run-offs, even as the Standing Repo Facility returned to zero usage.
That zero SRF print may be a sign of calm money markets. It also might support the view that the Fed can pause balance sheet shrinkage without triggering stress.
QT officially ended on 01 December. The mechanical liquidity drain has stopped, even if QE has not started yet.
How did Bitcoin’s price react?
On the 4-hour chart, Bitcoin’s price rallied by roughly 12.6% from the post-QT low, climbing from $83.5k towards the $93k–$94k band. Market bulls defended the $90.9k area as near-term support after the initial squeeze, while sellers still capped momentum near its most recent local highs.
Source: TradingView
At the time of writing, the world’s largest cryptocurrency seemed to be trading in a tight range – One that highlighted macro hesitation, rather than pure technical weakness.
Rate-cut odds sharpen the setup
Finally, according to the CME FedWatch tool, the probability of a 25 bps cut has now surged to 87.2%. Also, only 12.8% of traders expect the Fed to leave rates unchanged.
If that cut lands and inflation continues to cool down, BTC could see pricing conditions ease into Q1–Q2 2026. If the Fed pushes back, the recent 12% pop risks turning into a deeper consolidation.
Final Thoughts
- Truflation data revealed inflation at 2.45% YoY, down from 2.7% in November, while the BLS CPI reading on the widget sat near 3.0%.
- QT ended on 01 December, with BTC rallying by about 12% from its post-QT low after traders priced softer policy into 2026.