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Interest Rate Cut Path in 2026 Becomes Key Variable for Crypto Market, Increasing Disagreement at Federal Reserve
Summary: According to reports, the Federal Reserve has cut interest rates three times in 2025, bringing rates down to 3.5%-3.75%, but they still remain at an 18-year high. The latest dot plot shows officials are sharply divided on the interest rate path for 2026, with opinions split almost evenly on zero, one, or two rate cuts, ...
According to reports, the Federal Reserve has cut interest rates three times in 2025, bringing rates down to 3.5%-3.75%, but they still remain at an 18-year high. The latest dot plot shows officials are sharply divided on the interest rate path for 2026, with opinions split almost evenly on zero, one, or two rate cuts, leading to increased market uncertainty.
CME data shows that the probability of a rate cut in January is only 20%, rising to 45% in March. Most forecasts point to either one rate cut in 2026 or none at all.
Analysts believe that if employment weakens and inflation remains under control, there may be 1-2 rate cuts during the year, which would benefit risk assets. Conversely, if inflation rebounds, rate cuts and liquidity support may be paused, putting pressure on the stock market and crypto market. Additionally, Powell stepping down in May and the potential appointment of a new dovish chairman are also seen as important variables affecting the crypto market in 2026.
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Link: Interest Rate Cut Path in 2026 Becomes Key Variable for Crypto Market, Increasing Disagreement at Federal Reserve [Copy]
