The Federal Reserve on Wednesday cut rates of interest by 25 basis points to a goal range of three.5% to three.75%. However, analysts imagine that the mixed comments from Federal Reserve Chairman Jerome Powell will likely suppress the rise in Bitcoin price until the rate of interest cutting cycle resumes in 2026.
“In the short term, risks to inflation are trending upward and risks to employment are trending downward, a difficult situation. There isn’t any risk-free path for policy,” Powell said on the Federal Reserve Open Committee (FOMC) meeting on Wednesday.
These comments weren’t as “hawkish” as some analysts expected, but in keeping with market analyst and Coinbureau founder Nic Puckrin, the Federal Reserve under Powell’s leadership is anticipated to make only a single rate cut in 2026. He added:
“In early 2026, attention will turn to the Fed's liquidity and balance sheet policies. But despite today's announced Treasury purchases, quantitative easing will only come as things begin to unravel, and meaning an increasing number of volatility and potential pain.”
Low rates of interest are encouraging dangerous assets like Bitcoin (BTC), but only 24.4% of traders expect a rate cut at the subsequent FOMC meeting in January 2026, in keeping with CME Group.
Interest rate goal probabilities for January 2026. Source: CME
US President Donald Trump has been considering Powell's successor, with Kevin Hassett, director of the National Economic Council, widely seen as a number one candidate for the position. Hassett can also be a former advisor to Coinbase's Academic and Regulatory Advisory Council
Powell has mixed views, but Trump says next Fed chief will cut rates
Powell said consumer spending and business investment remained “solid,” adding that layoffs and hiring remained low. However, inflation stays “somewhat elevated” above the Federal Reserve's inflation goal of two%, while the actual estate sector remains to be considered “weak.”
The Fed reached these conclusions based on available market data, but Powell acknowledged that it’s missing months of public economic reports as a consequence of the U.S. government shutdown.
Trump has already pressured the subsequent Fed chair to chop rates of interest. Powell's term ends in May 2026.
