This Wednesday, before the Fed's interest rate meeting even starts, the bond market has already heated up. The 30-year US Treasury yield has soared to its highest level since September, and the 2-year yield has hit a three-week high—markets are voting with their feet.

Normally, a 25 basis point rate cut this time is pretty much a done deal, especially since they've done it twice in a row already. But interestingly, traders have suddenly become much more conservative about next year's rate cut expectations: now the general consensus is that there might only be two more cuts in 2026 (25 basis points each), which is about 5 basis points less than last week's expectation. Just a month ago, people thought there could be more than three cuts—the narrative has shifted quickly.

What's the issue? Most likely, this rate cut will come with "hawkish language"—in other words, they're going to tell the market not to expect rates to fall quickly, the stabilization period may last longer than expected, and the final stopping point for rates could be higher than previously thought. The logic is straightforward: inflation still isn't fully under control, economic data shows growth is still fairly solid, so the central bank naturally can't afford to loosen up too much.

For the crypto world, this means expectations for "looser liquidity" will have to be pushed back again.