Fed December Rate Cut Delay Pressures Crypto as FOMC Eyes March 2026 Easing

• The Fed's December meeting minutes signal no urgency for near-term rate cuts, pushing easing expectations to March 2026 at the earliest according to reports.
• Moody's chief economist Mark Zandi forecasts three rate cuts by mid-2026, conflicting with the Fed's cautious stance.
• Bitcoin faces renewed pressure amid elevated real yields and weak trading volumes as liquidity conditions tighten according to market analysis.

The Federal Reserve's December rate cut now appears isolated as policymakers signal a prolonged pause ahead. Meeting minutes reveal officials favor waiting to assess inflation and labor market impacts before easing further according to FOMC minutes. This stance clashes with Zandi's projection for three cuts by mid-2026. Risk assets like crypto enter 2026 navigating tension between delayed Fed action and aggressive forecasts.

Why Did the Fed Delay Further Rate Cuts After December?

FOMC minutes show several officials argued for keeping rates unchanged to evaluate lagged effects. Participants described December's 25-basis-point reduction as a "finely balanced" decision that requires clearer inflation progress to justify follow-up easing according to meeting minutes. Policymakers noted price pressures remain above the 2% target with tariffs contributing to stubborn goods inflation. Concurrently, the Fed observed rising employment risks including slowing hiring and muted business plans. Bottom line: Officials need more data before cutting again.

How Are Market Expectations Shifting for 2026 Rate Policy?

Markets now price April as the earliest realistic window for another cut rather than March according to futures data. Futures data indicates just two reductions in 2026, with the first likely delayed beyond January according to market forecasts. That contrasts sharply with Zandi's forecast of three cuts by mid-2026 citing labor market weakness and political pressure. Trump's influence could intensify as he appoints more Fed governors and Chair Powell's term nears expiration in May according to economic analysis. Midterm elections may amplify demands for faster easing too according to market experts.

What Risks Does This Pose for Crypto and Risk Assets?

Bitcoin trades in a tight $85,000-$90,000 range with thin volumes reflecting fragile sentiment according to market data. Elevated real yields and constrained liquidity create scarce upside catalysts for crypto markets according to economic analysis. Prices face downside vulnerability if economic data disappoints before the Fed's potential April move according to market expectations. Despite Zandi's optimistic projection, the Fed's higher-for-longer stance signals sustained pressure on risk appetite according to analysts. Crypto requires clearer signs of inflation moderation or labor deterioration to regain momentum according to experts.