The latest forecasts from the Federal Reserve indicate that 2026 may see only one rate cut due to the increasing division within the Federal Open Market Committee (FOMC). This forecast reflects the new "hawkish" stance of the central bank.
Interest Rate Forecasts and Historical Division
• Only one cut expected: The Fed insists on its expectations of a single rate cut in 2026.
• Unprecedented division: For the first time in over six years, three members of the Federal Open Market Committee opposed the recent interest rate cut decision, highlighting the divergence of opinions on how to balance the weakness in the labor market with ongoing inflation concerns.
• Narrowing of the easing path: This division is interpreted as a clear message from the Federal Reserve that the monetary easing path in 2026 will be narrower than markets hope, increasing uncertainty.
Impact of the hawkish shift on Bitcoin
Recent reports have linked the decline in Bitcoin's price to the Federal Reserve's shift towards a more hawkish path for 2026:
• Declining liquidity and risk aversion: The uncertainty regarding the trajectory of interest rate cuts and tightening expectations has led to decreased market liquidity and increased risk aversion, putting negative pressure on cryptocurrencies.
• Impact of expectations on crypto assets: High-risk assets like Bitcoin are negatively affected when monetary policy becomes stricter or when expectations for interest rate cuts are lower than hoped.
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