On January 7, Federal Reserve Governor Stephen Milan stated that current interest rate policy is "clearly restrictive" and is substantially dragging down the economy, adding that there are ample reasons for a rate cut of "well more than 100 basis points" in 2026. This statement is significantly dovish, contrasting sharply with the views of some officials who believe the policy is close to neutral, and highlighting the widening divisions within the Federal Reserve regarding the economic outlook and policy stance.
From a macroeconomic perspective, whether monetary policy has been excessively tightened ultimately depends on the actual performance of the labor market. This week, the US will release a series of data, including ADP, JOLTS, initial jobless claims, and non-farm payrolls. These key "employment health checks" will be crucial in determining whether the economy can withstand high interest rates. If employment remains resilient, the legitimacy of the Federal Reserve pausing rate cuts in the short term will increase; conversely, if the data weakens again, the voices of the radical dovish faction, represented by Milan, are likely to amplify rapidly.
At the crypto market level, this divergence itself constitutes an important forward-looking signal. The uncertainty of the interest rate path means that liquidity expectations will remain highly sensitive to data changes, and short-term volatility may be amplified; however, if subsequent employment and inflation both point to an expansion of policy shift space, the market will reassess the medium- to long-term liquidity environment, providing structural support for assets with "monetary attributes" such as Bitcoin.
Bitunix analysts believe the current issue is not merely a matter of individual officials' statements, but rather a convergence of policy divergences with key data. The direction of employment data will determine whether the market moves towards a "pause in interest rates" or "pre-emptively trading deeper easing," while the core focus for the crypto market remains whether there is a substantial shift in liquidity expectations.
