The Federal Reserve, led by Chair Jerome Powell, plans to pause rate cuts at today’s FOMC meeting in Washington D.C., resisting pressure from President Trump.
This pause may impact markets, notably cryptocurrency assets like BTC and ETH, which are sensitive to changes in U.S. interest rate policies.
The Federal Reserve is anticipated to pause interest rate cuts during the latest FOMC meeting despite pressure from President Trump. Chair Jerome Powell, whose tenure began in 2018, aims to maintain economic stability by resisting further cuts.
President Trump has been actively pressuring for rate cuts. However, Jerome Powell’s stance reflects efforts to ensure market independence. The meeting today at 2 p.m. ET will highlight the Fed’s approach towards ongoing economic challenges.
97.2% Market Confidence in Fed’s Decision
Financial markets show a 97.2% probability that rates will be held steady. Despite high tensions with the administration, investors believe the Fed will uphold its independence and refrain from succumbing to political influence. In alignment with these views, Benjamin Shoesmith states,
“Financial markets have not changed their pricing for rate cuts, despite an escalation of tension between the administration and Fed Chairman Jay Powell. Investors are betting the Fed keeps its independence from political influence.”
The decision holds consequences for Bitcoin (BTC) and Ethereum (ETH), with potential impacts on liquidity and borrowing costs. Historical trends show that these risk assets react to U.S. monetary policies, influencing their market behavior. The Overview of Central Bank initiatives for January 2026 can provide further insight.
Analyzing Past Fed Moves and Inflation Trends
This pause comes after three consecutive rate cuts in 2025, paralleling periods of high inflation in 2022. Similar market narratives have previously demonstrated the Fed’s independent approach against political demands.
KPMG economist Benjamin Shoesmith adds,
“Markets aren’t changing their rate cut pricing,”highlighting ongoing confidence in the Fed’s stance. Expert opinions suggest the first 2026 cut won’t occur before June, reflecting market expectations. Gregory Daco, Chief Economist, EY-Parthenon, opines,
“We anticipate 50 basis points of easing through 2026… the first 2026 rate cut is unlikely to occur before June.”
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