Economists' attitude shift: 58% probability that the Federal Reserve will keep interest rates unchanged in Q1, with rate cuts delayed until June or later

Reuters latest survey shows a clear shift in economists’ expectations regarding Federal Reserve policies. Among 100 surveyed economists, 58 expect the Fed to keep the federal funds rate unchanged in the 3.50%-3.75% range in Q1 2026. This contrasts sharply with the December survey last year, when most economists anticipated at least one rate cut.

Significant Shift in Expectations

Unchanged becomes the mainstream expectation

According to Reuters survey data, current expectations for Fed policy have shifted from “rate cuts” to “holding steady”:

This change reflects economists’ reassessment of inflation prospects. Although inflation has retreated from its peak, it has not yet fully returned to the Fed’s 2% target, prompting policymakers to remain cautious.

Delay in Rate Cut Expectations

More notably, 55 economists (55%) now expect the Fed to resume rate cuts in June or later. This implies:

• The high-interest-rate environment will likely persist through the first half of the year
• Markets should prepare for a longer-term tightening cycle
• The start of rate cuts has been pushed back by at least 3 months

Implications for the Crypto Market

Liquidity Environment Remains Tight

Maintaining high interest rates means:

• USD funding costs stay elevated
• Risk assets become less attractive
• The crypto market faces greater difficulty in attracting incremental capital

Market Repricing Expectations

The shift from “expect rate cuts” to “holding steady” may already be reflected in recent market performance. Such expectation adjustments often exert pressure on risk assets.

Next Steps to Watch

While economists’ expectations are not final decisions, they reflect market consensus on the Fed’s policy path. Key areas to monitor include:

• Latest statements from Fed officials
• FOMC meeting decisions at the end of January
• Latest inflation data developments
• Whether economists’ expectations will continue to adjust

Summary

The shift in economists’ attitudes from “rate cut expectations” to “holding steady” indicates rising uncertainty about Fed policy. With 58% expecting no change in Q1 and 55% delaying rate cuts until June or later, a prolonged high-rate environment is likely. For the crypto market, this suggests liquidity conditions will remain tight in the short term, and markets should prepare for a longer period of policy tightening. The Fed’s actual actions and economic data moving forward will be key in determining market direction.