Bitcoin traders are bracing for a Federal Reserve suspension next week, with data from CME FedWatch giving policymakers a 98.2% chance of keeping interest rates unchanged at their June 16-17 meeting.
Investors are focused on what Fed officials are signaling about the path forward rather than the decision itself, as the market sees only a 1.8% chance of a rate cut and no meaningful chance of a rate hike, according to CME FedWatch data.
All eyes are increasingly on the first Federal Open Market Committee, chaired by Kevin Warsh, which oversees both interest rate announcements and the release of updated economic forecasts.
Alongside the policy statement, officials plan to publish a revised economic forecast and a closely watched dotplot outlining how policymakers expect interest rates to move in the coming years.
The cautious stance is consistent with weakness across digital assets. Cryptocurrency market data showed that the market capitalization decreased by 2.47% in the past 24 hours to about $2.13 trillion, and Bitcoin (BTC) also fell as traders reduced their risk exposure ahead of the Fed’s decision.
Economists expect interest rates to remain unchanged until 2026
New Wall Street forecasts suggest policymakers could keep policy on hold for much longer than markets expected earlier this year.
According to a Reuters poll conducted June 4-9, 72 out of 102 economists expect the federal funds rate to remain in its current range of 3.50% to 3.75% through the end of 2026. Reuters noted that this represents the strongest consensus against further rate cuts so far this year.
Several factors contribute to this outlook. Reuters reported that better-than-expected economic data and continued inflation concerns have dampened expectations that the central bank will ease policy in the coming months.
Interest rate markets are also moving in a similar direction. As crypto.news reported, futures traders are now pricing in the possibility of at least one rate hike by late 2026, rather than expecting another rate cut.
Major financial institutions have also further supported the prospect of rising interest rates. As reported by crypto.news, BNP Paribas recently revised its forecast and now expects the Federal Reserve to start raising interest rates in December 2026. The French bank is forecasting three rate hikes during 2025, effectively reversing the previous three rate cuts.
Markets are focused on the Fed’s outlook and tone
The overwhelming majority of traders expect borrowing costs to remain unchanged next week, but the resulting forecasts could have a bigger impact on financial markets.
Current Fed data shows the effective federal funds rate is around 3.62%, within the target range of 3.50% to 3.75%. Inflation forecasts, growth expectations, and dot plot adjustments can impact expectations beyond 2027.
Inflation remains a key variable heading into the meeting. Market commentary cited in the original report pegs the U.S. inflation outlook at around 4.2%, with investors watching to see how Fed officials assess price pressures and future policy risks.
Political pressure also remains part of the discussion. As crypto.news previously reported, although President Donald Trump continues to advocate lower interest rates, Warsh said monetary policy decisions will remain independent of political influence.
For Bitcoin traders, interest rate hold is almost priced in. Instead, market participants are bracing for signals from Mr. Warsh’s press conference and the Fed’s latest forecasts that could shape expectations for liquidity conditions and risk assets in the second half of the year.
