FOMC signals hawkish stance, rate cuts possibly delayed until March 2026, crypto market faces increased pressure

As the Federal Open Market Committee (FOMC) released the December meeting minutes, Bitcoin and the overall cryptocurrency market came under renewed pressure at the start of the new year. The minutes indicated that the Federal Reserve is not in a hurry to continue cutting interest rates in the short term, and market expectations for liquidity improvement have been significantly pushed back.

The minutes noted that after a 25 basis point rate cut in December, most officials favored pausing further easing policies and delaying the next rate cut to as early as March. Some wording even hinted that the next clear rate cut could be around March 2026, which disappointed market expectations that had priced in a rate cut as early as January or sooner.

In the context of a sustained high interest rate environment, market sentiment in the cryptocurrency space remains under pressure. In recent weeks, Bitcoin has been trading within a narrow range of $85,000 to $90,000, unable to break through key resistance levels effectively. Overall trading volume remains subdued, and since the December correction, risk appetite has not shown a significant rebound, indicating that the market remains largely on the sidelines.

FOMC officials emphasized in the minutes that maintaining the current “interest rate target range” is more appropriate for now to assess the lagging effects of previous easing policies. Some members described the December rate cut as a “delicate balance,” noting that without more significant progress on inflation, there is no urgent need to take further action.

Inflation remains a core factor constraining policy shifts. The minutes acknowledged that although the labor market has cooled, overall price levels are still far from the 2% long-term target. Officials mentioned that tariffs continue to push up goods inflation, while service inflation has improved but at a limited pace.

Meanwhile, the Federal Reserve also noted rising downside risks to employment, including slower hiring, weakened corporate investment willingness, and increased pressure on low-income groups. However, most policymakers prefer to wait for more macroeconomic data before deciding whether to adjust the monetary policy path.

For Bitcoin and the cryptocurrency market, the signals are quite clear. In an environment where real yields remain high and dollar liquidity is tight, there are no strong catalysts for a short-term rally. Bitcoin’s sideways consolidation reflects the tug-of-war between rate cut expectations and the reality of interest rate pressures.

Looking ahead, if inflation further cools and employment data weakens significantly, March could become the first realistic window to revisit rate cuts. Until then, crypto asset prices are likely to face continued volatility and downside risks, with the macro environment remaining a key variable in determining the trend.