The Fed's interest rate cut path divergence in 2026 intensifies, and the cryptocurrency market迎来关键催化剂

The current federal funds rate target range remains at 3.50% - 3.75%. However, rare internal disagreements within the Federal Reserve—at the December 2025 rate decision, 9 members voted in favor and 3 against, reaching a high not seen since 2019.

On one side, Governor Milan openly advocates for a rate cut of over 100 basis points in 2026; on the other side, the median of the Fed’s dot plot shows officials plan only one rate cut in 2026, with a 25 basis point decrease.

01 Internal Policy Disagreements at the Federal Reserve

The December 2025 Fed meeting displayed an unusual split. The 9-3 voting result set a record for dissent since 2019.

This disagreement is reflected not only in voting but also in polarized policy stances. Governor Milan advocates for an aggressive 50 basis point rate cut, while Chicago Fed President Goolsbee and Kansas City Fed President Smith prefer to keep rates unchanged.

The dot plot further reveals internal divisions: among 19 officials, 8 expect more than one rate cut in 2026, with some predicting rates near the low 2%; another 7 advocate for a complete pause on rate cuts, with 3 even supporting rate hikes.

02 Diverging Views Among Policymakers

As 2026 approaches, Fed officials have become more vocal, with more pronounced differences. Governor Milan explicitly states that core inflation is close to the 2% target and that rates should be cut by over 100 basis points in 2026.

“I believe policy is clearly restrictive and is dragging on the economy,” Milan said in an interview on January 7. “Failing to lower borrowing costs in time could undermine strong economic growth prospects.”

Richmond Fed President Barkin remains cautious, emphasizing that current rates are in the neutral zone and future policy should carefully balance “full employment and inflation control,” to avoid triggering economic volatility.

03 Market and Fed Expectations Battle

The median of the Fed’s dot plot indicates only one rate cut in 2026, by 25 basis points; however, mainstream institutions forecast more aggressive easing.

Goldman Sachs, Morgan Stanley, and Bank of America all predict two rate cuts in 2026, bringing the policy rate down to the 3.00% - 3.25% range. Goldman expects cuts in March and June, while Nomura anticipates June and September.

CME “Fed Watch” data shows the market has largely discounted the possibility of aggressive rate cuts at the start of the year: the probability of a 25 basis point cut in January is only 18.3%, with an 81.7% chance of rates remaining unchanged.

04 How Rate Cuts Will Impact the Crypto Market

Owen Liu, Managing Director of Clear Street, points out that Fed rate decisions are key catalysts for the 2026 cryptocurrency market. When the central bank continues to cut rates, retail and institutional investors’ interest in digital assets tends to increase.

Rate cuts are generally favorable for cryptocurrencies because traditional investments like bonds and savings accounts become less attractive. As yields on safe assets decline, investors turn to higher-risk assets like Bitcoin and other cryptocurrencies seeking better returns.

This historical correlation has been validated in past market cycles. For example, after the Fed cut rates to near zero and launched large-scale quantitative easing in March 2020, Bitcoin surged from below $10,000 to over $60,000 within a year.

05 Impact of Different Rate Cut Paths on the Crypto Market

The Fed’s potential policy paths could lead to very different market outcomes:

Rapid, deep rate cuts typically indicate responses to significant economic slowdown or crises, potentially causing high initial volatility followed by liquidity-driven sharp rises.

Gradual rate cuts suggest confidence in a soft landing, possibly resulting in more stable, fundamentals-driven growth and sustained institutional interest.

Pausing or delaying rate cuts reflects ongoing inflation or strong economic data, which may continue to pressure risk assets, leading to potential market consolidation or declines.

06 Macroeconomic Data and Policy Basis

The US December 2025 non-farm payrolls unexpectedly surged by 256,000 jobs, well above the market expectation of 180,000, marking the largest monthly increase since March 2023.

Despite the strong employment data, wage growth slowed, with year-over-year increases dropping to 3.2%, indicating a mild cooling of the labor market.

The Fed’s key focus, the December 2025 core PCE price index, rose 2.8% YoY, stabilizing at that level for three consecutive months. The overall PCE price index increased 2.6% YoY, showing inflation pressures have not fully returned to the 2% target but are now moderate and controllable.

07 Market Trends from the Gate Platform Perspective

Against this macro policy backdrop, GateToken was priced at $10.48 on January 7, 2026, down 1.32% for the day. This market performance partly reflects investor reactions to Fed policy uncertainty.

Notably, GateToken reached a high of $10.78 and a low of $9.80 over the past month, demonstrating the crypto market’s high sensitivity to policy expectation changes.

Market participants are monitoring inflation, labor, and consumption data to assess how lower interest rates might translate into improved liquidity conditions next year. The Fed’s continued willingness to ease monetary policy will likely determine whether retail investors will heavily re-enter the crypto market in 2026.

Future Outlook

As of January 7, Bitcoin’s trading price was approximately $92,439, down 25% from its October 2025 all-time high. The Crypto Fear & Greed Index has been in the “Fear” zone since December 13, 2025.

Bitcoin surged to a new high of $126,080 in September 2025 after the Fed’s first rate cut, but this upward trend was briefly interrupted by a large liquidation event on October 10. As the policy path for 2026 gradually becomes clearer, changes in market liquidity environments will redefine valuation logic for risk assets.

The US dollar index oscillated and stabilized at 98.72 on January 7, with a slight increase of 0.15%. Global capital is focused on the Fed’s meeting on January 27-28, which will be the first key event to gauge the direction of monetary policy in 2026.