The U.S. Federal Reserve delivered a widely expected 25 basis point cut on Wednesday, lowering the target range to 3.50%–3.75%, but the uncertain guidance from Chair Jerome Powell tempered expectations for a Bitcoin surge in the near term.
Analysts say that Powell's statements - which are neither fully hawkish nor dovish - indicate that the important part of the easing cycle may not begin until 2026, leaving cryptocurrency markets without a strong macro catalyst in the short term.
Powell warns of "no risk-free path," indicating caution ahead
At the Federal Open Market Committee meeting in December, Powell emphasized the complexity of the current economic landscape:
"In the near term, inflation-related risks lean to the upside and employment-related risks lean to the downside - a difficult situation. There is no risk-free path for policy."
While the comments were softer than some feared, they lacked the clarity the market hopes for. According to Coin Bureau founder, Nick Backrain, Powell's communications suggest that a single rate cut may happen in 2026 under his leadership.
Backrain noted that liquidity, not prices, will be the main macro driver:
"Attention will turn to liquidity and the Federal Reserve's balance sheet policy in early 2026. Despite the Treasury bills purchase announced today, quantitative easing won't come until things start to collapse - which always means more volatility and potential pain."
Market data shows that traders are skeptical about more cuts before 2026
Bitcoin typically benefits from falling prices and increased liquidity, but futures traders remain cautious.
Only 24.4% of the market currently expects another rate cut at the Federal Open Market Committee meeting in January 2026, according to CME FedWatch data.
These doubts follow months of economic data shortages due to the U.S. government shutdown - a gap Powell acknowledged during the press conference.
Meanwhile, BTC traded around $90,375 after the announcement, holding within its recent range but lacking directional conviction.
Inside the Federal Reserve assessment: growth is strong, housing is weak, inflation is stubborn
Powell stated that consumer spending and business investment remain "solid," while labor markets continue to show a decline in layoffs and stability in employment.
However, he confirmed that inflation remains high, and the housing sector shows persistent weakness, limiting the Federal Reserve's ability to ease aggressively.
The recent lack of general economic reports has forced the Federal Reserve to rely heavily on market-based indicators - a point Powell has acknowledged could complicate policy making.
Policy overlooks monetary policy: Trump signals imminent change in Federal Reserve leadership
As Powell's term ends in May 2026, President Donald Trump is publicly considering a replacement.
Kevin Hassett, director of the National Economic Council and former advisor to the Academic and Regulatory Advisory Board at Coinbase, is widely regarded as the frontrunner.
Trump has already indicated that the next president is expected to accelerate rate cuts, adding political pressure to an already delicate economic environment.
Postponement of the rise of Bitcoin, not its cancellation
The Federal Reserve's decision in December reinforces a familiar short-term setup:
Prices are low, but not enough to stimulate a rush into risk assets.
Future guidance is mixed, limiting conviction in the near term.
Liquidity pumping has begun, but quantitative easing is still off the table until conditions deteriorate.
BTC derivatives show skepticism, with limited expectations for a breakout before 2026.
In other words, Bitcoin may remain confined to a range until clearer signals emerge from the Federal Reserve - or until the next phase of easing begins.
