Markets expect a rate cut of 25 basis points to 3.50-3.75 percent this week.
Historically, the price of Bitcoin rises by between 5 to 15 percent after a rate cut.
Data from "Jolts", unemployment claims, and OPEC forecasts add volatility risks.
Powell's tone will determine expectations for monetary policy easing in 2026.
The Hokanews platform indicates rising expectations ahead of the Federal Reserve meeting in December 910, as the market anticipates a 25 basis point cut to a range between 3.50% and 3.75%. This will be the third cut by the Fed in 2025, following the gradual decline in inflation rates. Analysts believe this move could be used to prepare for the entirety of 2026, especially if Jerome Powell paves the way for a more sustainable shift towards long-term monetary easing.
This meeting represents greater sensitivity for the cryptocurrency market. Typically, $BTC rises between 5% and 15% following a rate cut, due to increased liquidity and lower borrowing costs. Traders position themselves ahead of the announcement, hoping Powell will provide a signal on whether high-risk assets can continue their recovery by the end of the year.
Market sensitivity rises ahead of important economic data releases.
The interest rate decision alone does not carry the most weight this week. There are multiple indicators that could drive market sentiment to the extremes. The JOLTS job openings report released on Tuesday, unemployment claims on Thursday, along with the anticipated Upkal forecasts, all contribute to the fragility of the overall picture. Additionally, the 30-year Treasury bond auction at the end of the week introduces a new level of volatility, especially if demand weakens or yields rise.
According to economists, the narrative of a 'soft landing' remains, but it could easily falter. Any fundamental change in expectations could push investors to revise their assumptions about inflation, growth, and liquidity flows in early 2026. Since cryptocurrencies rely on high liquidity levels, they may respond immediately to any change in policy tone or economic indicators.
Why does the importance of this decision extend beyond December?
The press conference held by Powell may be more impactful than the cut itself. High-risk assets could see a strong rise if Powell confirms the continued trend of slowing inflation and indicates further easing in the first half of 2026. Conversely, warnings or signals regarding persistent inflation could slow momentum and strengthen the dollar, increasing pressure on stocks and cryptocurrencies together.
According to Hokanews, the significance of this week is reinforced by Bitcoin's previous performance. Historical cycles show that prolonged increases in the cryptocurrency market often follow a year-end rate cut, when liquidity expands. Powell's statements could shape the market in the first quarter of 2026, especially with some alternative currencies declining and broader markets awaiting confirmation signs.
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