Gu Jingci: Fed Rate Decision on 3.18 Looms, Where Will Bitcoin and Ethereum Go?

The Fed rate decision will be announced at 2 AM, followed by Powell's monetary policy press conference at 2:30 AM, which will directly influence the next wave of market movements in the crypto space. First, the rate decision at 2 AM is expected to keep interest rates steady at 3.5-3.75%, with a 0% probability of a rate cut—this is the current consensus. The key focus is on the core of the dot plot: in December last year, the dot plot projected one rate cut in 2026, but the main point of this press conference is whether the projection will be revised to two cuts or zero cuts. If there are no rate cuts, Powell's tone will be hawkish, emphasizing sticky inflation, data dependence, and a reluctance to cut rates quickly. Raising inflation expectations and lowering GDP growth forecasts would suggest maintaining higher rates for longer, leading to a short-term bearish outlook, with downside pressure dominating. Conversely, if dovish policymakers delay or cut rates multiple times, the US dollar and Treasury yields will decline, capital will flow back into risk assets, risk appetite will increase, and the crypto market could continue to surge sharply.

A dot plot showing zero rate cuts indicates expectations of tightening liquidity, which would strengthen the dollar and push up US Treasury yields. In a high-interest-rate environment, capital prefers the dollar and Treasuries, squeezing incremental funds from the crypto market. The market is sensitive to expectations of rate cut delays—buying the rumor and selling the fact—often leading to a dip followed by consolidation. If only one or more rate cuts are maintained, the stance will be dovish, with bearish signals materializing, resulting in modest rebounds or continued strong rallies followed by sideways movement. During the early morning speech, focus on Powell’s key words: if he emphasizes inflation stickiness and data dependence, it signals a hawkish stance; if conditions for rate cuts are deemed mature, it suggests a dovish approach.