JPMorgan doubts the Fed's key rate cut in 2026 - ForkLog: cryptocurrencies, AI, singularity, future

# JPMorgan Doubts About Fed Key Rate Cut in 2026

Analysts at JPMorgan, the world’s largest bank, believe that the Fed will keep the key interest rate in the current range of 3.5-3.75% throughout 2026. Reuters reports this.

The regulator may reduce the rate by 25 basis points around the second half of next year.

Previously, Goldman Sachs and Barclays, which predicted easing of monetary policy in March and June respectively, also postponed the timing of possible rate cuts to September and December. Morgan Stanley believes the Fed will not make such a decision before June.

Financial institutions have revised their forecasts amid the conflict between US President Donald Trump and Federal Reserve Chair Jerome Powell. The latter previously stated that the White House had threatened him with criminal prosecution for refusing to comply with the US leader’s demands to lower the key rate.

JPMorgan’s scenario diverges from market expectations. According to CME FedWatch, traders are pricing in at least two rounds of monetary easing.

Many crypto analysts share a similar view. They expect that cheaper credit will boost risk appetite and positively impact risk assets, including cryptocurrencies.

At the same time, bank experts left room for maneuver. They say that rate cuts will become relevant if the labor market weakens or inflation slows down.

“If the labor market again shows weakness in the coming months or inflation significantly decreases, the Fed may still move toward easing policy. However, we expect that by the second quarter, the labor market will tighten, and the process of inflation slowing will be very gradual,” JPMorgan clarified.

Favorable Environment

VanEck stated that the first quarter of 2026 will be a period of increased risk appetite due to clarity in fiscal and monetary policy.

https://t.co/K0FkMxj2yv

— VanEck (@vaneck_us) January 12, 2026

“As we enter the new year, markets are functioning with a level of predictability that investors haven’t seen in years,” analysts noted.

One of the key factors they named was “gradual improvement in the fiscal situation in the US”:

“Although budget deficits remain high, they are decreasing as a percentage of GDP compared to record levels during the pandemic period.”

According to experts, stabilization of fiscal and tax policies helps contain long-term interest rates and reduces the likelihood of extreme market events.

A high-risk appetite environment is considered favorable for digital assets and stocks of technology, AI, and related companies. However, after the October Bitcoin crash, it lost correlation with equity markets and gold.

Experts also pointed out the difficulty of short-term price forecasts for the first cryptocurrency due to the violation of the four-year cycle theory.

Recall that analysts predicted Bitcoin would rise to $100 000 in January. They say that outflows from digital gold have bottomed out, and the cryptocurrency has entered a recovery phase.