Is the "interest rate cut" bullish news in the crypto world shattered? JPMorgan predicts: The Fed will stay put this year and raise rates in Q3 next year

While the market is still buzzing about “when will interest rate cuts arrive,” JPMorgan Chase predicts that the Federal Reserve (Fed) will keep rates unchanged this year, and the next policy move might not come until Q3 2027. By then, it is more likely to be a “rate hike” rather than a “rate cut,” which contrasts sharply with mainstream expectations in the cryptocurrency market. According to Reuters, JPMorgan Chase stated that the Fed will keep interest rates in the 3.5% to 3.75% range “on hold” this year and will raise rates by 1 notch (25 basis points) in Q3 2027. However, the CME FedWatch tool shows that traders are heavily betting on at least two rate cuts this year, each by 1 notch. Many crypto analysts share this view, believing that lower borrowing costs will reignite risk appetite in the overall economy and financial markets, potentially bullish for Bitcoin. FXTM senior market analyst Lukman Otunuga pointed out, “Despite challenges in 2025, with shrinking active supply and rate cut expectations, Bitcoin could see a strong rebound in 2026.” Crypto bulls are pinning their hopes on the next Federal Reserve chair. Current Chair Jerome Powell’s term will end this May, and the market generally expects his successor to be more dovish than Powell. JPMorgan Chase’s rate hike forecast aligns with recent technical patterns in the 10-year U.S. Treasury yield. This pattern indicates that the 10-year Treasury yield, which serves as a global asset pricing benchmark, could challenge the 6% high within the next year (currently around 4.18%). If this scenario materializes, it could put significant pressure on overvalued assets and risky investments. However, JPMorgan analysts also emphasize that if the labor market weakens or inflation drops significantly, the Fed might pivot later this year. Yet, according to the latest employment data from December last year, the U.S. unemployment rate unexpectedly fell to 4.4%, indicating a highly resilient labor market.