Many analysts predict that the cryptocurrency market will enter 2026 amidst significant macroeconomic uncertainty, particularly regarding US monetary policy. Following three consecutive FOMC interest rate cuts, Federal Reserve Chairman Jerome Powell recently signaled that the central bank may pause this easing cycle, at least until the upcoming January meeting. The Fed's "wait and see" message has led global investors, including those in the crypto market, to become more cautious as the new year begins.
Interest rate tracking tools indicate that the probability of the Fed keeping interest rates unchanged is prevailing. According to market data, the likelihood of the Fed not cutting interest rates next month is above 70%, while decentralized forecasting platforms reflect a similar view, suggesting that interest rates will continue to remain within the current target range of 3.50%–3.75%. This suggests that investors believe the Fed is not yet ready to ease further, especially given the conflicting signals regarding inflation and the US labor market.
However, many investors still expect a more significant shift in monetary policy after the Fed appoints a new chairman. Jerome Powell is expected to leave office in May, and the big question now is who will succeed him in this powerful position, and what his policy direction will be. In this context, political factors are returning to the spotlight, especially as US President Donald Trump, who won the election in late 2024 and is currently in office, has openly expressed his desire for the Fed to pursue a more aggressive low interest rate policy.
In a recent speech, President Trump emphasized that the next Fed chairman will be someone who “really believes in aggressively cutting interest rates.” He has repeatedly stated his desire for US borrowing rates to fall to 1% or even lower, arguing that cheaper Capital will boost economic growth, support the real estate market, and facilitate business expansion. According to Trump, the announcement of the new Fed chairman will happen early in the year, and he asserted that mortgage payments for Americans will continue to decline.
