FOMC

Jerome Powell

Chair

Strike

Reserve

<p>All eyes are on the U.S. Federal Reserve today as it prepares to announce its latest interest rate decision. The Federal Open Market Committee (FOMC) will <a href="https://www.federalreserve.gov/" rel="noopener noreferrer nofollow">release</a> its policy update at 2:00 p.m. Eastern Time, followed by a press conference from Federal Reserve Chair Jerome Powell at 2:30 p.m. ET.</p>
<p>Markets widely expect the Fed to keep interest rates unchanged, with current expectations showing a 97% chance of no rate move. While some policymakers support cutting rates to ease borrowing costs, others prefer to keep them steady, pointing to persistent inflation and a strong U.S. economy.</p>
<h2 class="wp-block-heading" id="h-is-fed-likely-to-hold-rates-steady">Is Fed Likely to Hold Rates Steady</h2>
<p>Market expectations suggest that a rate cut would be a positive development for risk assets, including cryptocurrencies. According to Polymarket, traders are currently pricing in a 70% probability of a 25-basis-point rate cut. However, if rates remain unchanged, market sentiment could turn sharply negative.</p>
<p>As per the Fed Rate Monitor Tool by Investing.com, there is a 97.7% probability of a rate pause, while the likelihood of a rate cut stands at just 2.3%.</p>
<p>Recent economic data supports the case for no immediate policy change. U.S. CPI inflation remained flat at 2.7%, while the Fed’s preferred gauge, PCE inflation, edged higher to 2.8%. At the same time, labor market data has largely come in better than expected, showing resilience despite disruptions caused by the <a href="https://coinpedia.org/news/us-government-shutdown-in-january-risk-hits-38-amid-budget-deadlock/" rel="noopener noreferrer nofollow">2025 government shutdown</a>.</p>
<p>Former Federal Reserve Vice Chairman Roger Ferguson <a href="https://www.cnbc.com/video/2026/01/26/expect-a-wait-and-see-meeting-from-the-fed-this-week-says-roger-ferguson.html" rel="noopener noreferrer nofollow">said</a> policymakers are likely to remain patient.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p><strong>“The economy continues to show underlying strength, with durable goods orders holding up and unemployment remaining relatively low,” Ferguson noted, adding that inflation is still above the Fed’s 2% target.</strong></p>
</blockquote>
<p>These conditions give the Fed more flexibility to delay rate cuts until it has clearer evidence that inflation is moving sustainably lower.</p>
<h3 class="wp-block-heading" id="h-powell-expected-to-strike-a-familiar-tone">Powell Expected to Strike a Familiar Tone</h3>
<p>We do not expect major surprises from Chair Jerome Powell’s press conference. He is likely to reiterate that policy decisions will remain data-dependent, without committing to a near-term rate cut.</p>
<p><a href="https://www.kiplinger.com/investing/live/january-fed-meeting-live-updates-and-commentary" rel="noopener noreferrer nofollow">Chris Larkin</a>, Managing Director at E*TRADE from Morgan Stanley, believes politics could play an outsized role in the headlines.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p><strong>“Even though the Fed isn’t expected to cut interest rates, Powell’s press conference may be as much about Fed independence as it is policy,” Larkin said.</strong></p>
</blockquote>
<h3 class="wp-block-heading" id="h-fed-rate-cut-forecast-for-2026-remains-uncertain">FED Rate Cut Forecast for 2026 Remains Uncertain</h3>
<p>Looking beyond today’s meeting, forecasts for 2026 rate cuts remain mixed.</p>
<p>Goldman Sachs expects U.S. growth to accelerate to 2–2.5% in 2026, driven by easing financial conditions and tax cuts. Chief economist Jan Hatzius sees the Fed pausing in January, followed by rate cuts in March and June, potentially lowering rates to 3–3.25%.</p>
<p>J.P. Morgan, however, takes a more cautious stance, projecting the Fed will hold rates steady through 2026, with a possible rate hike in 2027 if inflation remains sticky.</p>
<p>TD Securities’ chief U.S. macro strategist Oscar Munoz believes easing is still on the table.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p><strong>“While Powell may sound noncommittal in the near term, the median Fed official still looks for easing this year,” Munoz wrote.</strong></p>
</blockquote>
<h3 class="wp-block-heading" id="h-bitcoin-and-risk-assets-face-fomc-volatility">Bitcoin and Risk Assets Face FOMC Volatility</h3>
<p>While today’s decision may appear uneventful, history suggests FOMC meetings often trigger sharp moves in Bitcoin and other risk assets.</p>
<p>According to data shared by <a href="https://x.com/alicharts/status/2016181551969525897?s=20" rel="noopener noreferrer nofollow">Ali Charts,</a> Bitcoin declined after seven of eight FOMC meetings in 2025, with losses ranging from 6% to 29%. The most recent meeting saw BTC fall 9%.</p>
<p>The pattern highlights that even when markets price in optimism ahead of Fed meetings, the post-announcement reaction has frequently leaned bearish.</p>
<h3 class="wp-block-heading" id="h-liquidity-signals-could-shift-the-narrative">Liquidity Signals Could Shift the Narrative</h3>
<p>Former BitMEX CEO Arthur Hayes <a href="https://cryptohayes.substack.com/p/woomph?r=gu0uw&amp;utm_medium=ios&amp;shareImageVariant=overlay&amp;triedRedirect=true" rel="noopener noreferrer nofollow">pointed</a> to growing stress in Japan’s bond market as a potential wildcard. He noted that a weakening yen alongside rising Japanese government bond yields could prompt intervention by U.S. authorities.</p>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
 <p><strong>“Such intervention would effectively inject liquidity,” Hayes said, adding that it could ease pressure on U.S. Treasury yields and provide short-term support for risk assets, including Bitcoin.</strong></p>
</blockquote>
<h2 class="wp-block-heading" id="h-faqs">FAQs</h2>
<div class="schema-faq wp-block-yoast-faq-block">
 <div class="schema-faq-section" id="faq-question-1769582648459">
  <strong><strong>What time is the Fed interest rate decision announced?</strong></strong>
  <p>The Fed releases its interest rate decision at 2:00 p.m. Eastern Time, followed by Chair Jerome Powell’s press conference at 2:30 p.m. ET.</p>
 </div>
 <div class="schema-faq-section" id="faq-question-1769582673883">
  <strong><strong>Is the Federal Reserve expected to cut interest rates today?</strong></strong>
  <p>No. Markets overwhelmingly expect the Fed to hold rates steady, with more than a 97% probability priced in for a pause.</p>
 </div>
 <div class="schema-faq-section" id="faq-question-1769582681048">
  <strong><strong>How do Fed interest rate decisions affect Bitcoin and crypto markets?</strong></strong>
  <p>FOMC decisions often trigger volatility in crypto, with Bitcoin frequently seeing sharp moves even when rates are left unchanged.</p>
 </div>
 <div class="schema-faq-section" id="faq-question-1769582704796">
  <strong><strong>Will the Fed cut interest rates in 2026?</strong></strong>
  <p>Outlooks are mixed. Some analysts expect gradual cuts, while others see rates staying higher if inflation remains persistent.</p>
 </div>
</div>

Fed Interest Rate Forecast: What to Expect From FOMC Meeting Today

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