Recent work suggests that anxiety biases how individuals form beliefs and estimate uncertainty, modulating learning. Yet the precise neural underpinnings of these computational alterations remain undetermined. Here we assess whether oscillatory activity in regions of the overlapping anxiety and decision-making circuitry, such as the medial prefrontal, anterior cingulate and orbitofrontal cortex (mPFC, ACC, OFC), is associated with misestimation of uncertainty and altered belief updating in anxiety. In a magnetoencephalography experiment, two groups of human participants pre-screened with high and low trait anxiety (HTA, LTA: 39) performed a volatile probabilistic reward-based learning task. A hierarchical Bayesian model revealed that HTA undermines learning through an overestimation of volatility leading to faster belief updating, more stochastic decisions and pronounced lose-shift tendencies. Using convolution modelling for oscillatory responses in the source space, we observed enhanced gamma activity in HTA during the encoding of unsigned precision-weighted prediction errors (pwPE). These effects emerged in the ACC, dorsomedial PFC (dmPFC), and OFC, and they were accompanied by additional suppression of ACC alpha/beta activity with pwPE and precision-weights in HTA. Our study supports the association between altered learning in trait anxiety and faster updating of beliefs through gamma and alpha/beta activity changes across the ACC, dmPFC and OFC.