Bitcoin ($BTC) Although the new week started with a decline, important developments are expected this week.
First and foremost is the US Federal Reserve’s interest rate decisions, which will announce their first interest rate decisions of 2026 on Wednesday.
What does Mr. Powell have to say? Hawk or dove?
The Fed cut interest rates in the final months of 2025, but rates are widely expected to remain unchanged. The market has priced in a 97% chance that the Fed will keep interest rates unchanged.
But what Federal Reserve Chairman Jerome Powell says will be far more important than the decision itself. The tone of Powell’s comments regarding future policy direction could increase volatility in both traditional financial markets and cryptocurrencies.
At this point, Chairman Powell’s comments are more important than the interest rate decision itself. It remains to be seen whether Chairman Powell will adopt a hawkish or dovish tone, but a hawkish message could highlight inflation risks and put pressure on Bitcoin and cryptocurrencies.
Conversely, a dovish stance and signals about a possible return to rate cuts in the coming months could support an upward trend in rates. $BTC And stocks.
For now, Morgan Stanley expects the Fed to send a dovish signal by keeping language in its statement that it will “evaluate the extent and timing of further rate cuts.”
While the broader market expects interest rates to remain stable, JPMorgan is in the minority. Most companies, with the exception of JPMorgan, expect the Fed to cut rates once or twice this year. In contrast, JPMorgan expects no rate cuts this year and a rate hike next year.
As you may recall, Powell suggested in a speech last December that a rate cut would occur in the second half of 2026.
Similarly, Minneapolis Fed President Neel Kashkari recently said, “It’s too early to talk about rate cuts.”
According to CME’s FedWatch tool, there is a 97.2% chance that the Fed will keep interest rates unchanged in the range of 3.5% to 3.75%.
*This is not investment advice.
