- There is a 22.7% chance for a 25 bps US Fed rate cut after the March meeting.
- Crypto prices are down over the last 24 hours.
- Warsh’s preference to shrink Fed’s balance sheet could be a key.
Employment and inflation data is scheduled to be rolled out soon. Meanwhile, there is a slight chance that the US Federal Reserve may cut rates in its next meeting. An official confirmation is awaited; however, crypto prices have started showing signs of refusal to accept any major change. It could still be hanging on a recent remark from the next Fed Chair.
US Fed Rate Cut Possible?
There is no official word, only anticipation on the grounds that US President Donald Trump is in favor of lower rates. But a report by Reuters mentioning CME Group’s FedWatch tool has highlighted the possibility of a rate cut. It mentions a 22.7% chance for the central bank to slash lending rates by 25 bps. The chances were 9.4% earlier. The revised rate could be announced after the 2-day meeting, which is scheduled in March 2026.
The market continues to panic over the uncertainty that is now fueled by January layoffs. The month saw an increase of 205% in planned layoffs, taking the number to 108,435, per Challenger, Gray & Christmas. Andy Challenger, from the global outplacement firm, has translated the situation as a sign of employers being less optimistic about the outlook for 2026.
The most recent layoff update is from Gemini, where the workforce has been cut by a maximum of 200 employees. Gemini, calling the move a part of strategic restructuring, has taken a step back from crypto betting initiatives at the moment.
Dips in Crypto Prices
Kalshi Traders did underline a high chance for crypto prices to go as low as $64k in 2026. It was later revised to $60k with a 90% chance.
Crypto prices have already dipped significantly – to an extent that they are now below the pre-Trump second term levels. This is largely applicable for BTC, which is hovering around $65,235.25 at the time of writing this article. That value is down by 8.21% over the last 24 hours.
Overall, the collective market cap has shrunk by 7.75% to $2.23 trillion with a single-digital FGI of 5 points. It is important to do thorough research and risk assessment before crypto investments, given the rising uncertainty and volatility across the global crypto market.
Fed’s Balance Sheet, a Key?
Kevin Warsh, the next US Fed Chair, expressed his preference to shrink the balance sheet of the US Federal Reserve. Cryptocurrencies have, reportedly & on the contrary, often benefited from the broader balance sheet. It is not the sole source to trigger the decline, but investors might be on the lookout to spread their allocations.
Crypto prices are down, and so are gold & silver prices, comparatively. A diversion to precious metals as an alternative during their course correction stands as one of the possibilities as well.
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